"More important than any budget" When Shark Tank investor Barbara Corcoran revealed her "mad money" concept

Financial success, according to Shark Tank star Barbara Corcoran, is about using money to improve your life rather than just conserving it. When a young audience member asked her about budgeting during an appearance on The Ellen DeGeneres Show, she gave an unusual response, saying:

"There's one thing more important than any budget, and that is the money you've got to give to yourself.”

Before her fame on ABC's hit program Shark Tank, Barbara Corcoran leveraged a $1,000 loan to build a multimillion-dollar real estate business. She's not just any financial counselor, though. Growing up as one of ten children on what she calls "a shoestring budget," Corcoran came from humble beginnings and has since developed financial values that often defy expectations.

She adopted her mother's "mad money" notion, which advocates putting money aside expressly "to do something for yourself that is going to make you feel like a million bucks, even if it costs $10."

This strategy reflects her larger view that financial success involves using money to improve life quality rather than merely saving and building riches.

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Barbara Corcoran’s ‘mad money’ concept and her philosophies explained

Barbara Corcoran's "mad money" concept stands in stark contrast to traditional budgeting advice. While most financial experts emphasize saving, Corcoran suggests allocating funds specifically for personal enjoyment.

The idea originated from Barbara Corcoran's mother, who raised ten children on limited means yet understood the psychological importance of occasional indulgence. According to Corcoran, this money isn't frivolous—it's essential for maintaining motivation and a positive mindset.

"Mad money" doesn't need to be extravagant. It could be $10 for a nice coffee, money for a concert ticket, or funds for any small luxury that brings joy. The key is intentionally budgeting for these personal treats rather than feeling guilty about them.

This approach aligns with modern financial psychology, which recognizes that overly restrictive budgets often fail because they're unsustainable. By building in planned indulgences, Corcoran believes people are more likely to stick with their overall financial plans.

Barbara Corcoran's financial advice frequently bucks traditional money management principles. Perhaps most controversially, she admits:

"I'm just not a believer in saving money. I've never saved a dime my whole life."

Instead of hoarding wealth, Corcoran advocates spending with purpose. After selling her business for $66 million, her first thought wasn't about investing or saving.

"I immediately thought of what I could spend it on," she revealed to CNBC.

Explaining:

"I gave half of it away to family, friends, education funds, charities, because I really believe if you spend, money comes back to you."

This philosophy extends to her career advice as well. Rather than advocating stability, Corcoran champions exploration. By age 23, she had already worked 23 different jobs, believing that trying various roles helps people discover their strengths and passions.

Comparing career exploration to shopping—you don't know what fits until you try it on, she explained on The Ellen DeGeneres Show:

"The idea is to try on as many jobs as you can, so you can find out who you are"

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Barbara Corcoran redefines success and failure

Corcoran's nontraditional financial advice stems from her experience overcoming personal challenges. Labeled as "dumb" in school and graduating with mostly D's, she understands how limiting beliefs can impact achievement.

In her famous TEDx talk at Barnard College, Barbara Corcoran shared insights about the difference between successful and unsuccessful people:

"The only difference between the people that were hugely successful and those that were not [was] that they took less time feeling sorry for themselves. Because if you can take the hit and keep coming back, you always hit the finish line."

This resilience-focused mindset informs her approach to both business and personal finance. Rather than avoiding risks to protect savings, Corcoran embraces calculated risks and views setbacks as temporary.

She particularly emphasizes overcoming self-imposed limitations.

"Your biggest enemy in business is not your competitor," she observed in an Inc. interview.

Elaborating:

"It's the negative tapes you have in your head from some other era, some injury, some insecurity."

Barbara Corcoran's "mad money" concept ultimately connects to this broader philosophy—by prioritizing joy and self-worth alongside traditional financial goals, she believes people build the confidence and motivation necessary to achieve lasting success.

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You can watch Shark Tank on ABC and stream it on Hulu, YouTube TV, and other live TV streaming services in the U.S.