A Gift is Still a Dollar
November 01, 2010Why do we tend to splurge on a bonus check or birthday gift check? Why do gamblers who just won a jackpot go across the street and buy a Rolex watch – something they never would have done otherwise? Traveling back East today, I am reading, Why Smart People Make Bad Money Decisions by Gary Belsky and Thomas Gilvoch. The book essentially enlightens us about human nature and how it relates to money and what we can do about it. I learned a few new things and validated some things I already knew.
I knew about money gifts. We see those dollars differently. As a teenager and through college, I worked as a lifeguard at the community pool. Looks like a glamorous job sitting up in the lifeguard stand with your whistle, but we did earn every penny working long hours. They started with swimming lessons, then afternoon free swim and often ended with private pool parties for hire in the evenings. So when I got my $250 paycheck, I watched where I put it. I worked hard for that money.
Now when my birthday rolled around, my dear Grandmother and Grandfather would send me a check. I always spent half and saved half but that was extra money – gift money and it sure spent differently. I probably never would have splurged like I did with my lifeguard paycheck. The best splurge I ever did was to purchase a silver plated flute which 20 years later I am playing again and am told that it tripled in value.
A dollar is a dollar and to think differently is a money mistake. They are exactly the same. I was the one who assigned the meaning to them. I could easily have splurged on my hard earned lifeguard paycheck as I did on my birthday gift. But I didn’t. I made that choice.
Think about that when you get a bonus, an inheritance, or win something. The dollar is a dollar. You assign the meaning to it. Would you splurge on this if you had to work 80 hours to get it? Probably not.
All I can say is I am glad I have the flute today and don’t even remember what else I splurged on over all those years. But I do thank my grandparents for urging me to at least save half.