What do people mean when they say this?
I think the fact that you have to ask means there probably isn't a universal definition. So it means whatever they think it means. You'd have to ask them.
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Now for speculating, in olden days we called sugar babes mistresses. They were given financial perks for being available in some manner socially and or sexually. So that really encompasses a lot of territory.
This is one of those where you're going to get a very different answer from men and womne.
Women: Give me an allowance and I'll decide when I feel it's convenient for me to put out.
Men: I'll give you what I consider a fair price for a roll whenever and wherever I feel like it, but you have no claim on me.
Fortunately there can be a meeting in the middle where both sides get some but not all of what they want.
I've always thought the phrase "A Traditional Arrangement" meant one in which the SB and SD would get together IRL from time to time. As opposed to the newbies who think an "online arrangement" is a thing. Online arrangement is a contradiction of terms! If it's online, it's not an arrangement! In a Traditional Arrangement, whatever the two of you do when you get together, and however you decide to compensate her for her participation, is totally a matter between the two of you. The key element is that you actually do get together.
NOW YOU HAVE MONEY!!!!!!! DON'T EVER CALL ME EVEN IF YOUR PATHETIC LIFE DEPENDS ON IT.!!
Truly. Maybe you've had interactions with the bad actor who stole my identity on Seeking recently. But I don't know you nor have I ever had any communications with you. I am a regular and respected contributor to this board, so I am saddened by your flames. I'd actually like to know what prompted this negative attack. If you could send me a private message I'd appreciate it. And guys, do any of you know who this MaybeMatbellline person is and why she would post something like this?
The long lost Princeapea!!! lol.
He's been spamming other threads with similar comments.
I do not know who you are, and apparently, no one else who posts on the Erotic Highway does either.
Please either qualify your messages with some context and an explanation of your background, and reasons or experiences that support your comments and opinions.
If you are just here to spam and flame, please do us all a favor and STFU.
Life is good
The Cat 
If you read all his posts they follow a similar pattern of pretending to know the target. Weirdo.