plonkee money an english-er's thoughts on personal finance

June 25, 2009

money isn’t the same in my head

Filed under: philosophical — Tags: , , — plonkee @ 7:28 pm

Isn’t it funny how not all money is the same?

Now I know with my intellectual maths graduate brain that money is fungible – which is just a fancy way of saying that it’s all the same. £1 is worth £1, and $1 is worth $1.

But you wouldn’t think it to look at how I actually work. I own a house which currently requires:

  • a small repair to the roof
  • containment of the little shop of horrors backyard ivy
  • gas fires removing
  • maybe damp sorting out in the bathroom
  • a new bathroom suite
  • insulation in the loft
  • a new front door

But, I went out and spent 2 years worth of earnings from this blog on a new (to me) oboe. Which is fine, because the oboe purchase makes me happy, but not so much, because it never occurred to me to spend the money on the house. In my head, I’d allocated blog money to the oboe fund and it couldn’t be spent on another purchase.

a useful mindset

In some ways, the idea that some money is different can be very useful. It can stop you from impulse spending money that’s set aside for another purpose. It can help you keep track of your goals.

In my case, whilst I didn’t need the oboe as much as I need to make repairs to the house, it was the first thing that I’ve really saved up for. As far as my learning and playing was concerned, I’d progressed well beyond the capabilities of the oboe that I was borrowing. Spending the money on a more sensible purchase would probably have been more grown up, but I’m not really all that grown up at heart. It didn’t work out too badly – at least I have something to show for my efforts.

or less than helpful?

On the other hand, if I’d thought about it, maybe I could have managed to squeeze out a new bathroom instead of the oboe (plus little shop of horrors and damp work which would be prerequisites). By not considering the money fungible, I didn’t give myself a chance to make that decision. I stuck to the idea that I had last summer, without re-evaluating.

This time, it hasn’t been the end of the world. Even if I’d thought about it, I might well have bought the oboe rather than been more sensible. Next time I might not be so lucky.

Do you tend to think of money as all the same, or as each pot having a specific purpose? Let me know in the comments.

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