I think one of the most brilliant ideas of all time is casinos using chips as currency.
Why? If everyone had to stand at the gaming tables and put a $5, $20 or $100 bill down every time they lost a bet, most wouldn’t stay very long. The use of chips instead creates a psychological disconnect and it’s easier to forget that there’s real money involved.
This article is about a related phenomenon – something I call “money units.”
When I was just starting my career after college, I had a group of friends also just starting out and (we’re not sure how in hindsight given how little we were making at the time, but) we used to have occasional great nights out which often started with steak dinners.
We were new to working in the real world, new to making money and it’s an overwhelming time to some degree. We had gone from scrimping and watching every penny in college to making actual regular salaries.
When we spoke to each other about money, instead of placing a dollar amount on it, which often felt too intangible, we found that it was often easier, and more fun, to quote dollar amounts in other units instead – sometimes steaks.
I don’t remember what the conversion was back then, but lets just say that every $25 was a steak. So if I was considering a purchase for $250, that was 10 steaks. If I owed a buddy $100, I owed him 4 steaks. I wouldn’t necessarily pay him that way, but it put a real value on the money… and maybe I would actually have to pay for his next 4 nights out. People think about money differently, but some would take comfort in knowing that their next 4 steak dinners would be covered. Some would even rather have that form of security instead of the money.
The point is: especially as society continues to transition from cash to electronic transactions,
sometimes money just seems like a number in your bank account.
On some level that can be good, especially for quantitative people who will focus on the number, and growing it.
On another level that can also be bad – for people who forget that number has real-world consequences and that when it hits 0 it’s a problem, because you can’t pay for the things you need anymore.
And for everyone it’s sometimes just so theoretical that people forget that its real value is in the things you can do with it. Basic needs, experiences, investments, items to make your life easier or more luxurious – these are the things money can buy. It also is a number that you can’t take with you in the end.
As a kid I remember thinking every $40 meant I could buy a new video game, in prison they use cigarettes or cans of tuna, on Sex and the City it was pairs of shoes… At the beginning of your career you may just view money as a number of meals, and then as your career and life progress maybe you can start to think of it as cars and hopefully at some point as a number of years that you don’t have to work.
Sometimes you have to remind yourself that money isn’t just a number sitting in your account – think of a unit, or multiple units, as a way to value what you have, what you spend and what you really need.
-DD
Want to explore more ways to think about money and maximize the happiness you get from it? Read our Theories!
Theory 1: The Iceberg Theory of Income
Theory 2 : The Need for Speed Theory of Spending
Theory 3: The Mountain Biking Theory of Happiness
