I received a $50 gift certificate for Christmas and used at it a store this weekend.  I felt like I was getting a great bargain on my purchase.  But I had given a $50 gift to the original giver, so in the end, it wasn’t “free money” at all.

The same thing happened with a $20 rebate on my dog food.  When the rebate card came, I felt like I had a bonus $20, but it was really reimbursement for my own money that I had already spent.  The same way a tax rebate feels like a windfall, even though it isn’t.

The more removed we are from money, the more distorted our view of things becomes. Paying 50 cents/hour cash at the parking meter feels like a lot, but $7/day at the airport doesn’t after living in a major city.

Would we spend differently if we had an immediate cost to payment ratio?  Would we use energy-hogging appliances if we had to pay cash in the plug every few hours?  Would we run as many copies if we had to drop dimes in the meter for each one of them?  Or would we drive on short errands so frivolously if we had to pay the cost of gas and ownership at the end of each trip like with a taxi?

It’s easy to become comfortable with expenses when we only focus on the short term. Think about your real financial picture as you go through the next week.  Time displacement may have your true ledger a bit unbalanced.

— beth triplett

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