You know what you want. And you’ve finally got it – a sugar daddy and an allowance amount that makes you smile.
You’re pleased, you’re excited, but you’re also wondering…what exactly do I do with this money?!
A sugar baby allowance is unlike anything you’ve received before. It’s not income from a place of work. It’s not a little birthday check your grandparents sent you. It’s a regular infusion of cash and you’re going to have to come up with the best way to handle it.
Every sugar baby has her own preferences and pretty soon, you’ll find what works best for you. In the meanwhile, here are some of the most popular ways sugar babies like to receive their allowance (in no particular order).
One way to receive your allowance is in cold, hard, untraceable cash.
Pros: Cash is pretty much untraceable.
Cons: Cash is a good option because well, it’s untraceable, but we would only recommend going the cash route if you’re very, very good with: 1. not losing things and 2. managing your cash. Anyone whose received a bulk of cash can testify how easily it is spent and how difficult it is to recall precisely what it was spent on…
And even if you’re really good at both those things, cash still comes with a few downsides:
Tips on getting cash: If you decide to go the cash route, we recommend doing this as soon as you get your allowance:
Another popular way to receive your allowance is through bank deposit. Once you trust your sugar daddy, you can give him the name of your bank, your name and your bank account number and he can make weekly, bi-monthly, or monthly deposits directly into your account.
Pros: Hands-off and easy. Plus, the money in the bank is typically more secure than hoarding wads of cash under your mattress.
Cons: The biggest con is the possibility of tax trouble.
According to Forbes.com:
“The minimum deposit that require banks to report it to the IRS is $10,000. Reporting of bank deposits over $10,000 or more is required by the federal law in accordance with money laundering and drug trafficking laws. Failure to report transactions over the said amount are punishable by law.”
Most sugar babies have an allowance that’s under $10K, but regular deposits of a few thousand dollars might also set off bank alarms and some prefer to be safe than sorry.
Pros: Instant, fast, convenient, and protects personal information.
Cons: There remains an electronic record of every payment your sugar daddy sent your way. This might not be a problem, but PayPal has new regulations…
“PayPal says it will use your tax ID number to send tax Form 1099-K to you and the IRS when the payments you receive exceed both of these milestones in a calendar year:
- $20,000 in gross payment volume for goods and services
- 200 payments”
Most sugar babies won’t meet these regulations (i.e. 200 payments), but all that information will be sitting in your PayPal account if the IRS does decide to go browsing.
PayPal is no longer the only viable peer-to-peer payment method – there are a whole host of other apps that let you receive your sugar baby allowance with only the username and/or email associated with your account. No personal details = no chance of a potential sugar daddy scamming you.
Which apps are best? Try SquareCash, Google Wallet or Venmo (which was acquired by PayPal).
Pros: Same as PayPal – instant, fast and protects your personal information. The next time a potential sugar daddy asks you for your bank account password – so he can “check” the payment – you can give him your email address or tell him to go take a hike.
Cons: Again, there will be an electronic record of the transactions so it’s not anonymous.
This is probably one of the best options for sugar babies.
Pros: Pretty much as untraceable as cash, easy to reload, can withdraw money from the card and use it to pay all your bills.
Cons: It could be a headache if you lose it. To make sure you can be re-issued a new one and not lose the money you have in your account, be sure to keep a copy of your card number as well as the toll-free number listed on the back of the card.
Another popular option for sugar babies is to have their sugar daddies pay all their bills.
Pros: No money – or very little money – actually changes hands. He pays the rent, tuition, and other bills directly so you have no bills to worry about.
Cons: Lack of control and you have to disclose all of your bills information and personal information to your sugar daddy.
Bitcoin – the infamous cryptocurrency – is no longer the sole domain of drug dealers and money launderers. In fact, it’s a great way for a sugar baby to get paid 🙂
Pros: Everything is pretty much anonymous since sugar daddies can make payments and sugar babies can receive payments without their personal information being tied to the transactions.
This lessens the risk of scams and identity theft (although if you’re worried about your sugar daddy stealing your identity, he probably shouldn’t be your sugar daddy…).
Cons: The most obvious downside of Bitcoin is that it does require some – albeit minor – tech know how to handle. Your SD and you will need to find services online to use it properly and you’ll have to take care of your Bitcoin key storage and make backups.
Another consideration is the fact that Bitcoin’s value fluctuates…a lot. This would’ve been really awesome news if you had Bitcoins in January 2013 (when they were worth $14) and kept them until now (when they’re worth over $700) but if you get caught at a time when they’re sliding in value and you need to withdraw them to pay your bills – that’s not a happy transaction.
We’d recommend Bitcoin for somewhat tech savvy sugar babies who have enough to cover basic living expenses and want to use an anonymous, 100% independent currency to receive payment as a backup savings and investment account.
As for sugar babies who need all of the allowance for living expenses – skip Bitcoin.
There is really no right or wrong way to receive your allowance. Just go with the option you’re most comfortable with and remember to always do your research!
*Updated November 19, 2016