Money Matters

The bills have started rolling in for some of the work. The roof is done now, so their bill came this week. The gutter guy sent us a partial bill for the work he's done so far. We also finally got the bill from the heating guys for the draining, flushing and refilling of the radiators. I don't think I blogged about it, but they also put in a vent for our dryer, so that was on the bill too.

I've been thinking a lot about my spending habits over the last few months; how I spend money, where I spend money and how I think about money. I got to thinking about it quite awhile back after I had read an article talking about how Carnegie Mellon used brain scans to show how we decide whether to buy something or not (the study of neuroeconomics). The traditional view of economics says that we must decide if the value of the trade is worth more than the future value of what is being given up. Should I trade my chicken (which will give me eggs tomorrow) for several loaves of bread (which can feed me now). It turns out we focus more on the value of the trade at the very moment of potential exchange. In other words, our current needs and desires tend to outweigh our future concerns. Eggs be damned. Give me the bread. I'm hungry now.

I couldn't find the original source material, but here is a good summary. I'm sure a bit of googling will turn up more information.

Anyway back to where I was going. I used to think that I was extremely good with money, that I was thrifty. But when I thought about the amounts of money I've spent in my life and how I've spent it, I realized that this just isn't true. It's taken me some time to figure out what my relationship with money is.

I hate the act of spending money. In other words, for me, giving up money is stressful. What gets me in trouble is that for whatever reason, I've lost (or never had) a sense of the value of money. It causes me almost as much discomfort to spend $25 or $25,000. Spending $10,000 once is less stressful to me than spending $1,000 ten times or even five times. It's why I will pick quality, or the long-term solution almost every time. It also means I have a tendency to spend more, in the hopes that paying out more money now will mean I won't have to spend money later.

Obviously, this is not always the case. Sometimes the best solution is the cheap and fast one. It's a lesson I need to learn.