Is All Money REALLY Equal?

I’ll probably get some flack for saying this, but I don’t consider all money the same. If you give me $100 and tell me it’s to pay off my cell bill, it’s not the same as telling me it’s to buy my next coin :) Sure it’s technically still $100 either way you look at it, but emotionally it’s completely different.

(And if you haven’t figured out by now, I base a bulk of my decisions on emotions over facts – though of course those are also important to keep in mind)

To me, money is more than just stats and numbers. It’s a part of your lifestyle. It helps you get from point A to a better point B depending on how you use it. And for that I divide mine up as follows:

  1. Money for all my bills
  2. Money for saving/investing/debt slaying
  3. Money for ME.

The first one there is the least exciting of the categories, but also one of the most important. So I allocate all that first and foremost (I don’t “pay myself first” as people like to say) and then I count all the rest as “extra.” To be applied into category #2 – GROWING my net worth. Depending on my current goals, this will either flow into our savings accounts or our investment accounts (Roth IRA, Sep IRA), or – as it stands today – into our mortgage pay-off accounts.

As for category #3 – “money for ME” – that gets filled up anytime I get outside unexpected money and/or gifts. Receive a bonus of $300 from an employer? Money for me! All birthday and Christmas money thrown my way? Money for me! It all goes towards anything in the world I want regardless of budget and/or deals and/or anything at all that I normally obsess over ;)

THIS is the money that I enjoy the most. The stuff I praise higher than all the rest of the money flowing in. And to me, the stuff that’s *worth* the most in terms of happiness and excitement. I get much more joy out of a free $20 credit to TJ Maxx than I do $200 to buy new car tires! Now as I said, the money for bills and growing your savings is a billion times more important than any side money you bring in, but it still doesn’t change my feelings towards it all.

And that’s the main point of today’s post. Money in categories #1 and #2 is a must to reach financial freedom, but money from #3 is the stuff that keeps me sane and on track. Without #3 I’d probably bore myself to death and/or lose focus and start dipping into the money that’s supposed to be totally hands off. And that wouldn’t be good for anyone.

So point #2 for today? Give yourself some “no questions asked” spending money so you don’t crack under the financial pressures you’re putting on yourself. It doesn’t have to be much, but anything you can siphon off to relieve some stress and capture some fun will definitely be worth it. You can’t go hardcore 24/7 or you’ll crack!

That’s how my mind works anyways… I know it won’t be the same for everyone, but if you’re looking for permission to spend a little on yourself as a reward for all your hard work, consider it granted :) I’m gearing up to pick up my next fabulous gold coin… with 100% of money set aside from Christmas gifts. FINDING the time to go splurge on yourself now is a whole other situation, haha… I have yet to figure that one out ;)

Happy Friday, sexy bitches!

[Photo by @boetter, tweaked by J$]

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  1. Lance @ Money Life and More February 1, 2013 at 7:20 AM

    Nice breakdown! It does make sense that spending money has a more special place in your heart. I do have some spending money but rarely spend it all because I’m not a big fan of smaller stuff.

    I am however having a bit of a dilemma with my larger money hoard I was planning to use it on my girlfriend’s student loans when we get married… it’d be so much more fun to buy a beach front condo! I actually wrote about it today at my blog if anyone wants to help me with some advice.

    Of course, that’d mean I was taking money for bills to pay for a want, but the want is a nicer housing situation which I guess isn’t totally necessary. What do you think about sub-optimal money decisions J? We’d still pay the loans off but not as fast. Plus, a down payment is often considered like a bill…

    1. J. Money February 1, 2013 at 8:58 AM

      Haha, well I know what your problem is right from the start – You’re creating a massive savings pile instead of paying off those loans every month! As if to maybe give you hope one day to use it elsewhere ;) But I don’t blame you – I do the same thing!

      I couldn’t tell you which route to use it all is best, but I must admit I do like your beachfront idea :) Living like you’re in retirement *now* over later – I could get down with that… What if you just divided up the money and had best of both worlds? Or use the chunk now for the condo and then use all future money for X number of months/years to pay off the rest of the loans?

      Either way I think you’ll be okay – you’re a smart one. Keep us updated :)

      1. Lance @ Money Life and More February 2, 2013 at 9:02 AM

        The only reason for the massive pile is because we aren’t married yet. Better safe than sorry even though there is virtually no chance of her leaving. We’re getting married this year most likely so a decision will be made one way or the other! I’ll keep you updated.

        1. J. Money February 2, 2013 at 9:36 AM

          yes yes, def. makes sense :) she’s marrying a smarty!

  2. nGneer February 1, 2013 at 8:14 AM

    If I considered my bonus from my employer as spending money I’d be a baller :). It’s always hard to receive thousands of dollars in addition to my regular checks and not invest, save or pay off debt. It’s not fun being financially responsible (at the moment).

    1. J. Money February 1, 2013 at 8:59 AM

      I think it’s VERY smart to actually apply bonus money & raises back into investing – that’s what I did 100% of the time too! I couldn’t splurge that kind of money… I’m more about the smaller $50 here and $100 there that come out of nowhere over job-stuff. You def. gotta keep lifestyle inflation in check, so keep it up :)

      1. Mortgage Mutilator @ Mutilate The Mortgage February 3, 2013 at 2:10 AM

        See I’m quite like this too however even the smaller $50-$100 things I still can’t bring myself to buy! It’s not because we’re in a bad financial state or anything I just hate buying useless crap… and most things are useless or unneeded once you’ve got the basics in life. I also feel like I’m just adding to the ever growing problem of people building and selling endless plastic made things that just further destroys the environment. Living a Spartan lifestyle is very relaxing too :-)

        1. J. Money February 8, 2013 at 7:40 PM

          haha I hear ya man… I used to not find anything worth spending it on but my new coin hobby has changed all that ;)

  3. The First Million is the Hardest February 1, 2013 at 9:07 AM

    I completely agree. After my bills are paid and I’ve saved/invested what I’m going to out of each check I let myself spend the rest any way I want. It’s important not to get so caught up in saving and budgeting that you forget to let loose and enjoy the money you earn sometime too!

    1. J. Money February 1, 2013 at 9:39 AM

      Yup! And I agree with your blog title 100%, haha… that first one IS seeming hard to reach!

  4. Joe @ Retire By 40 February 1, 2013 at 9:11 AM

    I have been really really tight in the “Money for ME” category because my income was reduced so much last year. Since quitting my job, we haven’t been to any shows or a really nice restaurant. I wanted to give it a year before I loosen the purse string again, but I think you’re right. The Mrs. is starting to get cabin fever and we are doing allright financially so we’re going out to a nice restaurant this weekend.

    1. J. Money February 1, 2013 at 9:40 AM

      You definitely have to do what you have to do, no doubt about it. I’m impressed you’ve already gone a year without treating yourself to anything! You guys def. deserve it this weekend – have fun out there! :)

  5. David Hunter February 1, 2013 at 9:23 AM

    $200 for new car tires?! Where do you shop?!! Ha

  6. J. Money February 1, 2013 at 9:40 AM

    I dunno, it was just an example :) Is that too low or too high? I have no idea! Haha…

  7. Eric J. Nisall - DollarVersity February 1, 2013 at 9:45 AM

    That last category is something that gets overlooked WAY too much in my opinion. I’m actually a little tired of saying it every time the subject comes up, but many people just don’t get it: there are no guaranteed tomorrows; saving every freakin’ penny for that “rainy day” isn’t going to do much if today is the last one anyone has or tomorrow something happens to prevent the ability to follow through with plans to spend it in the future.

    People need (yes, I said NEED) to spend today. That doesn’t mean blow all of your savings or waste money, but do things that bring you joy or can be imprinted in your memory forever. Being able to save for the future is great, and more people should be doing it, but not at the expense of today. Too many people have regrets when they get older about putting things off until a “later time” only to lose out on the opportunity because in that later time they weren’t physically able to do them. I sure as hell don’t want to be like that when I reach a certain point in life!

  8. J. Money February 1, 2013 at 9:58 AM

    Preach on brotha, preach on!

  9. RenataIA February 1, 2013 at 10:07 AM

    I agree completely with giving yourself some “me” money. I have been on the “allowance” systems for years. I allow myself $50 per week “me” money. I budget for the “me” money just like any other line item in my budget.

    1. J. Money February 1, 2013 at 9:37 PM

      Love it! My rough number used to be $100/week when I used to go back and forth to work all the time… Now that I work from home I don’t go out much which means I don’t spend much too :) Except on Amazon/etc, but I rarely go over $100/week anyways.

  10. Mike @Personal Finance Beat February 1, 2013 at 10:10 AM

    I have my ING accounts set up pretty much the same way. My checking account acts as the central hub of sorts to funnel money into different accounts:

    1. E-Fund
    2. Brokerage
    3. Spending/Vacation

    Now, account #3 only sees a fraction of the money compared to #1 and #2 (about 6% of my total post-tax income), but I love knowing that it’s there *specifically* for me to spend!

    When you go to such lengths to make sure you’re in great financial shape, and are socking money away to save every month, it’s a great feeling knowing that there’s also a guilt-free spending account along side of all that :)

    1. J. Money February 1, 2013 at 9:38 PM

      Heck yeah!! As “guilt-free” as people like us can be, at least :)

  11. Samantha February 1, 2013 at 10:20 AM

    Wow. I’m surprised to find I disagree with this post! But let me tell you why. We budget all of our foreseeable income, and included in that budget is a category for “Me Money”. Its where a little bit of each paycheck goes to our separate accounts and we get to spend it on whatever we want: lunch out with coworkers, Starbucks, manicures, massages, or for my hubby, some new computer part. We can’t judge each other for these purchases nor feel guilty for them, cause its the Me Money Fund! No rules: you are more than welcome to save your Me Money, or spend it on secret gifts for each other, or whatever. Its awesome, and without it I certainly would have burned out long ago, plus it helps save us from fighting over each others’ vices.

    That being said, the little extra money that we get out of the blue is what has really given us the boost to get out of debt much faster than we ever thought possible. That Christmas bonus check, birthday money, tax return… when its all ‘snowballed’ to hit a goal, its amazing what you can accomplish. Like paying off your mortgage 23 years early! ;)

    1. J. Money February 1, 2013 at 9:40 PM

      Well that’s even sexier! You get to enjoy these mini splurges every month whether you get any nice surprises or not :) And since you’re prioritizing paying off debt/etc, no shame at all in just excellerating that even more. I did the same thing back in the day.

  12. John S @ Frugal Rules February 1, 2013 at 11:00 AM

    I could not agree more! Life is way too boring and can easily become monotonous with the fun money included. I remember the person who introduced me to budgeting and she told me to have money just to blow on myself. It seemed so counter-intuitive to me at the time, but she was dead on right. You’re right though, finding the time to spend it is a much different story.

    1. J. Money February 1, 2013 at 9:40 PM

      Gotta have built-in stress releasers!

  13. Edward Antrobus February 1, 2013 at 12:06 PM

    I should probably dedicate some money to spending on myself as it would probably help with my binges (fortunately relatively small and short lived). But my spending simply isn’t consistent. I can go weeks without wanting to spend any money and wanting to sock away every cent for the inevitable time when my income dries up and money is tight. And then there will be days where I just want buy lunch and then blow another $20 to try a new recipe that my wife probably won’t even eat!

    1. J. Money February 1, 2013 at 9:41 PM

      There’s nothing wrong with that though :) I just save my birthday/Christmas money/etc until something pops up I really want. Then once that’s gone, I’ll go back to being more frugal but when more stuff comes up I just take it from my “cushion” built into my budget. Only cuz we have that in there, if we didn’t I’d be waiting a loooong time to spend some more, haha…

  14. Mrs. Pop @ Planting Our Pennies February 1, 2013 at 12:57 PM

    I definitely have different levels of equality in terms of money. Like when I recalculate our net worth and the house goes up in value… that doesn’t really mean more money for me if I’m not ever planning on selling it. Just kindof phantom money…

    1. J. Money February 1, 2013 at 9:42 PM

      Oh, most definitely. None of that matters unless you go to sell! Or refinance or take out a home equity line/etc. So I guess you *could* get money out of it, but still. You’d have to pay it all back anyways :)

  15. Crystal @ Prairie Ecothrifter February 1, 2013 at 4:55 PM

    We give ourselves a little spending money every month too. The trips I take with friends or the little splurges here and there are way more fun than paying for utilities. Yep, I’ve always been a fan of making sure to budget in some fun. :-)

  16. Jacob @ iheartbudgets February 1, 2013 at 5:55 PM

    I’m tracking with ya, brotha! I actually think you’ll waste more money if you don’t budget in spending cash, because, like you said, you’ll crack under pressure and splurge. But if you have some cash to spend every now and then, you can keep the stress down and keep things rolling.

    1. J. Money February 1, 2013 at 9:44 PM

      It’s like I always told people who studied 24/7 in college – You need to have some fun or your brain won’t be as efficient! I knew this one kid who would NEVER ever EVER go out with me on the weekend cuz he was constantly reading or studying – he ended up bombing like 3 of the 5 exams he had where as I studied hardcore for maybe 75% of the time and I sailed through… We were in different courses and are completely different people of course, but still – all that hardwork of his didn’t do any good cuz he failed out! Makes me sad just thinking about it again… he was a great guy :(

  17. Grayson @ Debt Roundup February 1, 2013 at 6:01 PM

    You have to have that money to spend on yourself. Sometimes it is necessary to keep those emotions in a good place and money does that for almost everyone.

  18. Greg@ClubThrifty February 1, 2013 at 8:52 PM

    Well played brother J. Well played.

    I don’t think that your system is off at all. In fact, this may be the most normal thing that you’ve ever posted;) I think we all need a little bit of a reward in order to stay focused. If all you ever do is sacrifice and feel pain, you aren’t going to want to do that for very long. There is a huge emotional aspect to any type of spending, and you have to keep yourself sane – as long as you keep it in check and don’t do any major damage to your goals. That is why we take several vacations a year. We wouldn’t make it otherwise.

    1. J. Money February 1, 2013 at 9:45 PM

      Hah! I’m a “normal” blogger today – woohoo! Glad you liked it and agreed, my man ;)

  19. 30kto30million February 1, 2013 at 10:02 PM

    Hmmm something about the title of this blog article just doesn’t sit well… I find all money to be equal.. no qualms about it.. your enjoyment you get from it is only from your eyes.. the money never changes.. so if your not as happy with how your using your money in categories one and two maybe need to re-evaluate.. are your bills really paying for things you enjoy that much.. maybe you have a nice big house or apartment when you don’t really care about that..
    I think should be just as excited for your “financial freedom” and have a clear vision that your excited about so you feel like all your money is doing what you want it to be doing regardless of how much you have..
    Just found this site and am enjoying the reads!

    1. J. Money February 2, 2013 at 9:40 AM

      Glad you like it :) And you raise some great points as well – it’s all in the eyes of the beholder. I’m much more of a “here and now” type guy with feelings and money, so it’s easier for me to appreciate that than stuff in the future – even though most of my money goes towards retirement stuff… So I do appreciate the idea of financial freedom, but until we reach that I get more excited about money today :) We all work differently though!

  20. stephanie February 1, 2013 at 10:23 PM

    I agree totally! Right now I’m in the 3-month-track-it-all (and I mean ALL) and believe me, without that bit built in each week for “me spending” I’d be going flipping crazy-nutters! It makes me feel good when I write down an expense, and follow it with a notation “planned”.

    I also like the idea of having a set amount, say $20/week, as opposed to a %. I’m most realistic when I see $150 as opposed to x-percentage. Can’t explain it, it just is. And yes, absolutely-a credit at TJ Maxx or wherever is the BEST! I get to revel in a spending splurge, while not actually spending my money. Oh, thinking about that…I have a $33 credit at a store which is having 20% off your entire purchase tomorrow. No exclusions.

    Thanks for the very sexy post J…I feel better about this week’s targets already!

    1. J. Money February 2, 2013 at 9:41 AM

      Wonderful! So glad you’re on the up and up and feeling good about things – that’s when you know you’re on the right track :) And I totally agree with the set amounts over %’s too – much easier to understand easily in the brain and move on to the next thing. Keep doing whatever works best for you!

  21. Sarah Park February 2, 2013 at 5:34 AM

    It is just actually like saying money is quite big when you see the figure, but once it is in your hand and you start spending, it is equivalent to a cent already.

  22. Jose February 2, 2013 at 8:51 AM

    I have to agree wholehreartedly with item number 3. Paying bill and savings are important. But if there’s not enough left over for “you” then you run the risk of burning out. I like to say that “you have to keep the machine well oiled”. If the machine breaks down, or gets frustrated, the entire financial plan can be threatened!

    1. J. Money February 2, 2013 at 9:42 AM

      YES! Great analogy, indeed. Thanks for stopping by friend :)

  23. Tony@YouOnlyDoThisOnce February 2, 2013 at 9:29 AM

    Very cool J. Money. Considering I used to spend money with reckless abandon, my only “reckless” mine is called BLOW money and is in an envelope in my system. I put $50 in there a month. That’s all I get. I can live with that…for now. Great post!

  24. J. Money February 2, 2013 at 9:43 AM

    Sweet! I don’t think I could do just $50 a mo, so you’re a better man than I :)

  25. My Financial Independence Journey February 2, 2013 at 10:13 PM

    I need to do a better job of budgeting in some no questions asked money. Currently I tend to obsess over every line item on my budget in order to reach my goal of a 50% savings rate. We get bonuses mid year. If I get one, I hope to allocate 50% of it for fun. That way I can keep up my savings rate and maybe budget in some big ticket enjoyment.

    1. J. Money February 3, 2013 at 10:20 AM

      That’s a nice compromise :)

  26. David W February 2, 2013 at 10:50 PM

    I know how you feel, I even deposit birthday money separately in my “fun” account just to make sure it doesn’t get mixed in with the mortgage money and vice versa.

  27. J. Money February 3, 2013 at 10:21 AM

    Haha yup! Although even that is hard for me to do because usually once it’s in a savings account it doesn’t come back out! :) I personally need to keep it in cold hard cash and 100% separated so that I indeed spend it on myself like planned.

  28. Cat February 4, 2013 at 11:24 AM

    I also use emotions in relation to money all the time. Not to mention, if what I am doing to earn my money makes me happy, it doesn’t matter if it is considerably less or doesn’t get me to my overall goals as quickly.

  29. J. Money February 4, 2013 at 8:10 PM

    As seen in your recent decision to book a one-way ticket to Hawaii!! I still can’t believe you’re doing that – so cool!! :)

  30. RJ February 5, 2013 at 9:56 PM

    Yes…exactly! I luv it…it’s all about balance. Balancing yourself with your finances. Balance in our lives is overlooked a lot, but so necessary. I’ve had my share of ups and downs with money, like $40,000 in debt, and many other life things, but when I start to get too crazy on one side I try to remember that I have to be balanced.

    Great work man!

  31. J. Money February 6, 2013 at 8:55 AM

    Balance is key! Not always the easiest thing to remember, but when you can it’s awesome :)

  32. Mary Rhodes February 7, 2013 at 12:27 PM

    Not all money is equal, i should know I’m from Zimbabwe where we experienced hyper inflation and the money was worthless!! Now I live in the UK their money is stable!!

  33. J. Money February 8, 2013 at 7:41 PM

    Wowwww I can’t even imagine that!

  34. Nick from BayCrazy March 10, 2013 at 8:12 PM

    Definitely got the order of importance of financial management right there; and I’m only recently learning to fully stick to that ethos myself but, it actually feels… pretty good to stick to it, pretty good to stay in the green zone, even if as you rightly say ‘it’s all numbers and stats’, which is quite right ; it’s theoretically meaningless and I think we’d be better off in a different economical and societal structure… but for now, we’re stuck with it!

    So we may as well make the best of it!