Money Matters
Money Matters
By Jonathan Clements
We make countless decisions—financial and otherwise—with little or no thought to the dollars at stake:
We purchase items that we know are overpriced and almost guaranteed to lose value, but we do so happily, because they have a meaning for us that’s far greater than their price tag. Think of artwork and vacation souvenirs that are purchased because they remind us of moments we treasure. We prize family possessions for their sentimental value, even though they typically have scant financial worth. Indeed, after a family member dies, often the biggest squabbles are over possessions with no resale value. We spend endless dollars on our family, while rarely—if ever—asking whether we’re wasting money.
None of this is especially surprising or, I’d argue, irrational. We’re talking about the pursuit of happiness—and that involves making choices where we receive greater value than the dollars we’re forking over.
Instead, what’s surprising is this: When that emotional resonance isn’t there, we typically default to money as the yardstick for measuring someone or some thing’s worth.
We assume successful entrepreneurs and Hollywood stars must—in some sense—be special, simply because they have or earn a lot of money. We assume items are desirable, simply because they come with a large price tag. These are, to borrow from a recent piece by HumbleDollar contributor Jim Wasserman, Veblen goods. It’s hard to shake this way of thinking, even though it runs contrary to what we experience every day. We don’t think our older daughter is superior to our younger son, just because she earns more money.
We don’t have the urge to throw out every household possession that would command little or nothing on eBay. When we think about the people and things in our lives, we think in absolute terms. If we care about them, we care about them—period—and not on a scale of one to 10.
But when we turn to the larger world—the world we don’t know personally—the 10-point scale comes into play.
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