On the Money is a monthly advice column. If you’re looking for advice on spending, saving or investing — or any complicated emotions that may come up as you prepare to make a big financial decision — you canSubmit your question in this form. Here, we answer a question asked by Vox readers, edited and condensed.
Why is money so hard?
Dear Letter Writer,
You asked this question earlier in the year; Now that we’re coming to the end of it, I may have an appropriate framework with which to answer it.
The literal answer is that money is hard because it is a representation of value. Unfortunately, we often fail to earn and spend our money for what we actually value. Different industries are motivated to determine the exact minimum amount of money we are willing to accept for various tasks and how much we are willing to pay for certain items, believing that we will give them exactly what they want. Much of what’s left goes toward experiences we don’t really value and costs we can’t control.
The metaphorical answer is a bit more complicated:
It’s the holiday season for many of us, a time when we demonstrate our values to one another. A person who values frugality shops on sale, a person who values frivolity shops full-price, a person who values skill makes handmade ornaments or puts calligraphed labels on jam jars — but whatever you choose, you’re usually a Spends an unusual amount of time or an unusual amount of money.
Most of us choose the money route, and even those who choose the DIY route need to buy mason jars and calligraphy pens. So we set budgets — some of us do, anyway — and divide our holiday shopping lists into affordable allotments. So much money for gifts, so much money for clothes, so much money for travel etc.
At this point, if we think practically, we book travel first. It cost more than we expected, even if we set aside more money than last year. That’s because airlines, rental car companies, and hotels understand that getting to a certain vacation destination is a high-level value in almost everyone’s mind — a value taught and reinforced by much of the media associated with the holiday season, as well as social expectations — and these companies Can accurately charge what the market will bear.
So we end up booking flights or rental cars or hotel rooms, or we look at gas prices to estimate how much it might cost us to drive and whether it’s possible to pack a cooler instead of stopping to eat. Along the way, and then we tell ourselves that we can always balance our budget by spending a little less on gifts.
Except we don’t want to spend less on gifts. We want to let the people we love know how much we love them, and that hasn’t changed since we booked our flight, so why should we cut back on what we spend on gifts? We do not want our family to bear the burden of insufficient budget. We don’t want to face disappointed children or disgruntled relatives.
And so — because we value those we love, and because we consider ourselves generous and holiday-loving — we spend more than we can afford.
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Sometimes this excessive cost comes from what may be considered a necessity. This is the year to give your child a bike, for example, because next year may be too late. However, many of us quickly run into overspending that is less useful. It would be the “well, we’re giving Nana three presents, so I better make sure Pop-Pop has three presents too” thing, the kind of financial absurdity that leads to ridiculously unnecessary novelty purchases or drugstore sale bin dregs.
No one wants these gifts, and yet we feel as if they should be given, and so we exchange money that we cannot afford or have not yet earned.
There’s another level of added expense that occurs when someone else assigns you holiday responsibilities that you didn’t expect. This year, your team is doing Secret Santa. This year, you’ve been invited to a themed party that requires you to buy an ugly sweater or a silly hat. This year, Nana and Pop-Pop want everyone to send in family photos so they can make a calendar. This year, your neighbor gave you a gift, and so you wanted to give them something too.
And so we spend, and spend, and spend, and tell ourselves we’ll figure it out later, maybe we’ll get a raise or pick up a side hustle or apply for a 0 percent intro APR balance transfer credit card — because this is the year. What we are supposed to do at this time. Everything around us and around us asks us to book trips and buy gifts and attend parties and take pictures, and if we don’t enjoy all of this as much as we should, or can’t afford to spend as much as we want, we’ve failed.
That’s why money is hard, dear letter writer: because we spend our vacations the way we spend our lives.
Fortunately, New Year’s resolutions are right around the corner. This year, consider solutions to understand both what are you worth And What price will you pay?. From there, you may be able to exchange your value for money at the rate you want and exchange your money for your value. It’s the only way through this mess of personal finance, and it’s not easy — but I’ve done it, and other people I know have done it, so I hope you can too.
