Why is money so hard?

 

There is a monthly advice column on Money. If you want advice on spending, saving or investing – or any of the complicated emotions that can arise as you prepare to make big financial decisions – you can enter your question on this form. Here we answer a question from Vox readers that has been edited and condensed.

You asked this question at the beginning of the year; now that we’re nearing the end of it, maybe I’ll have a suitable framework with which to answer it.

The literal answer is that money is difficult because it represents value. Unfortunately, we are often unable to earn and spend our money according to what we really value. Different industries are motivated to set the exact minimum amount of money we are willing to accept for various jobs and the exact maximum amount of money we are willing to pay for specific items, confident that we will give them exactly what they ask for. Much of what’s left over goes toward experiences we don’t really value and expenses we can’t necessarily control.

The metaphorical answer is a bit more complicated:

For many of us, it’s the holiday season, a time when we show each other our values. The person who values ​​thrift, the person who shops the sales, the person who values ​​full price at extravagant stores, the person who values ​​their own skills to handcraft ornaments or put calligraphic labels on jam jars – but no matter what you choose, you usually end up spending an unusual amount of time or an unusual amount of money.

Most of us choose the money route and even people who choose the DIY route have to buy mason jars and calligraphy pens. So we’ve set our budgets—at least some of us have—and broken down our holiday shopping lists into affordable chunks. So much money for gifts, so much money for clothes, so much money for travel and so on.

At this point, if we are thinking practically, we will book the trip first. Somehow it’s costing more than we expected, even though we budgeted more money than last year. That’s because airlines, car rentals, and hotels understand that reaching a particular vacation destination is the highest value in almost everyone’s mind—a value taught and reinforced by much of the media associated with the holiday season, as well as societal expectations—and these companies can charge exactly what the market will bear.

So we end up booking flights, car rentals, or hotel rooms, or looking at gas prices and estimating how much it might cost us to drive and if it would be possible to pack a cooler instead of stopping for food. on the way and then we think we can always balance the 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 the amount we love hasn’t changed since we booked our flights, so why should the amount we spend on their gifts decrease? We don’t want our families to have to bear the burden of an insufficient budget. We don’t want to face disappointed children or disapproving relatives.

And so—because we value the people we love, and because we value the idea of ​​being generous and festive—we spend more than we can afford.

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Sometimes these excessive expenses stem from what can be considered a necessity. It is the year when you can give your child a bicycle, for example, because next year may be too late. However, many of us quickly fall into the kind of overspending that is less useful. That would be a “well, we’re giving Nana three presents, so I should make sure Pop-Pop gets three presents too” thing, the kind of financial imprudence that leads to comically unnecessary novelty purchases or drugstore trash. .

No one wants these gifts, yet we feel they should be given, so we exchange money we can’t afford or haven’t earned yet.

There’s another level of overspending that occurs when someone else entrusts you with a holiday responsibility you didn’t expect. This year your team is doing Secret Santa. This year, you’ve been invited to a theme 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 to make a calendar. This year your neighbor gave you a present, so you better give them something too.

And so we spend and spend and spend, thinking we’ll figure it out later, maybe get paid, or pick up a side hustle, or apply for a 0 percent APR balance transfer credit card — because that’s what we’re supposed to do this time of year. Everything in and around us tells us to book travel and buy presents and attend parties and take pictures, and if we don’t enjoy it all as we should or can’t afford to spend however we wanted, we’ve failed.

That’s why money is hard, dear letter writer: Because as we spend our holidays, we spend our lives.

Fortunately, New Year’s resolutions are out the door. This year, consider resolving to understand both what do you value and what value do you offer. From there, you may be able to improve the rate at which you exchange your value for money, and exchange your money for what you value. It’s the only way to get through this personal finance mess, and it’s not easy—but I and other people I know have done it, so I hope you can too.

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