Mad money is commonly defined as any sum of money that you would set apart for personal use, emergencies or purchases you may not have planned for, among any other such ends. It is a good concept when it comes to investment and managing your finances. You can aportion your money to different categories say, savings, spending, charity, among other such categories. With a mindset as this your finances are well managed and secured, for instance if you get an emergency you would not have to take from what you have saved up for investments, instead you will take from that portion you've set apart for that reason. It helps you grow your finances much more intentionally.
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The concept of mad money could easily be a very good way to save. It works this way; you set some money aside for when you need to make an impulse purchase or for emergencies. The concept comes from money that a lady often carries when she goes for a date, which she might need to use just in case the date doesn't go as planned, and she needs to pay some bills or her transport or something like that. The idea is that if you have some money stored away for these situations, then you won't have to spend your savings on emergencies. The thing about emergencies, is that they will often come up, and it is good to actually be well prepared for such moments. It's these moments that usually dig deep into your pockets if you hadn't planned for them.
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