On mental accounts, gift cards, and credit card rewards

One of the trends in the personal finance community is extreme frugality.  Included with that trend of extreme frugality is a suggestion of not using cash money to pay for gifts for other people, but to use gift cards gotten as gifts, credit card rewards, and so on.

From a strict economics perspective, this seems ridiculous.*  Money is fungible.  Keeping a credit card that gives you 1% rewards in gift-cards that “count” as not spending money on your PF blog makes way less sense than switching to a card that gives you 1.5% back directly to your bank account or credit card bill.

However, from a behavioral perspective, this type of budgeting can make a certain amount of sense.  Some people really do have problems with spending, and they may have problems with spending more on other people than they do on themselves.  For some, a little bit of spending can open the floodgates– if they’ve already dipped into the main account to give a gift, what’s the problem with giving a little more?

For these folks, having this forced budget with money that is outside of the regular income/outgo is an easy way to limit spending. Gift cards and cash-back rewards seem like extra money and can be put into a specific mental account that can help people control their spending.  Folks can drain the separate account without feeling like they’ve dipped into the main account, limiting additional desires to spend out of it.

It still doesn’t make sense for cards gotten from Swagbucks to “count” as not spending but money from a part-time job doesn’t count.  Being paid in cash vs. something less useful doesn’t have to be the dividing line for your mental accounts.

The problem occurs when you decide on purpose that you want the less useful form of compensation (or less remunerative form of side-work) because you’ll be able to spend that without guilt, or worse, you’ll have blog-cred for using it that you wouldn’t have if you got the cash back and set a separate gift budget.

And bloggers who brag about not spending any money on trips or vacations or shopping because they used “credit card rewards money” are being disingenuous.  Money is money.  That money could have just gone back into their account to pay off debt or save for a down payment or early retirement or whatever it is that their blog is about.  They chose to spend it, and there’s nothing wrong with that, but it still could have been used as, you know, money.

*Exception being one in which you would not use the card anyway.  For example, you’re in the situation where you have a $25 Starbucks gift card and you don’t drink coffee, but that’s the favorite coffee-place for someone you owe a gift worth at least $25.  From an economics perspective, it’s totally rational to count that $25 card as free money to you, assuming that reselling to get the cash value of the card is too much hassle.

link love

Pick 2:  Enjoyable, by a woman, modern literary classic.  Related.

Ladybugs

So much with the laffs.

Yeah, so it seems like I’m not the only person making the connection between Trump and Hitler.  And not in a Godwin’s Law kind of way.

This seems important.

Renting vs. buying:  a thorough post by afford anything.

DH made this.

These are fun.  (No affiliation)

Felicia Day and MST3K

this is kind of cool

Ask the grumpies: Crying at work

SP asks:

Crying at work. Have you ever done it? Have you seen others do it? How bad is it? …

I cried at work this week in a pretty embarrassing way, although the people I already like a lot were totally great about it and most people did their best to let me ignore it. Plot twist: I work with almost all men, but the person who brought out the tears was the only other woman in the room of ~20. Although it was really really just a completely screwed up situation, and it was more the situation than the person itself. But she absolutely did not help! … I’m basically mortified by it. I think my emotions were correct, just didn’t intend on displaying it!

I wonder how one practices reacting with less emotion. I suppose I could avoid going into known war zones when I’m on edge, but I’ve had no luck willing myself to respond calmly.

That’s a hard one. Personally, I am against crying at work in front of people and suggest that you apologize to whoever you cried in front of (assuming that we’re not talking about someone getting hurt or dying etc., which are socially acceptable reasons to cry at work) in a way that is both professional and slightly embarrassed in demeanor.   It looks like ask a manager has similar advice on apologizing in a slightly embarrassed way across a number of different posts (so this is a common question).

Ana notes

My thought on this is that, yes, try your best to avoid it, but if it happens, its clearly out of your control. Sure I can be “against it” in theory (because it makes me super-uncomfortable!) but who cries at work in front of their colleagues on purpose? Its sometimes a physiologic response that you couldn’t hold back, like a burp.

Apologize self-deprecatingly and move on. I wouldn’t think badly of someone for doing it once, particularly if the situation was truly terrible. If its happening a LOT, and you can’t leave the job/situation, then figure out how to change your reaction (therapy!) because crying on a regular basis at work does come across unprofessional.

Chacha adds

I have never out-and-out cried at work, but a little teary-eyed – yes. Sometimes due to personal stuff like a sick cat; sometimes due to rage and frustration caused by the work.

But sometimes it is that reflex thing, and oddly most likely to happen when I have a very *pleasant* exchange with somebody. It’s like little tears of happiness trying to escape. I am not a crier by nature and this particular manifestation always astonishes me.

Nowadays I make a point of reminding people that I am perimenopausal and not 100% stable. :-)

As to how to not cry at work.  That’s probably going to be different for different people.  For me, personally, because of my physiology, I got much better control of my emotional responses after I quit hormonal birth control and stopped eating refined carbs and sugar.  Cognitive Behavioral Therapy helped a bit before then in graduate school (I automatically start deep breathing when stressed), but the eating more whole foods seemed really miraculous, probably because I wasn’t expecting that side effect.   I also teach a really hard required math class and have pretty much eliminated student crying by forcing chocolate on students who start getting sniffles.  Do not underestimate the power of chocolate.  (Indeed, Willpower suggests eating something to replenish your willpower.)

#2 says:  Haven’t we all cried at work?  Step one:  close office door.  If no office door, hide out in bathroom stall.  Most of us have done this.  It’s embarrassing, but it happens, like farting in front of your boss’s boss or something.  It’s biology.

Grumpy nation:  Any advice for SP?

Cute kitten pictures!

How to write a power-point discussion (economics-specific)

The goal of a good discussion is to explain to the audience where the paper fits into the general social science/policy framework and to help the paper improve for the future.  The goal is not to destroy a paper but to improve it (see exception below).  Discussants are serving science!

1. Frame question— why is it important?  (You can mention your own work here if applicable.)
2. Briefly summarize paper.  If the presenter is great, you will be able to skip the summary or only go over what you see as the most important parts.  If the presenter is terrible, your audience will really appreciate figuring out what they just heard, so it’s good to be thorough on your slides if you don’t know a priori how good the presenter will be.  If applicable, here would be a great place to take the author’s work through a “sniff test”– Bridgette Madrian is one of the best discussants I’ve seen, and one of my favorite discussions of hers was where she took a person’s paper (on whether or not we need 70% of our income after retirement) and applied it to her own life with a spreadsheet and came to the conclusion that the paper’s thesis was plausible.  Sometimes discussants will call up experts in the industry to ask their qualitative opinion.  Really great discussants will sometimes replicate or extend with another dataset.  None of these things are necessary, but if they’re easy for you or an RA to do, they can really push you to be memorable (though being invited to discuss more papers is not necessarily something you want to do!).
3. Constructively point out problems with the paper and suggest solutions (if any).  Don’t be a dick.  Frame these as questions to think about, how big a problem you think they are etc . Don’t use this part as a place to talk about why your work is awesome and theirs sucks.  If you do mention your work in this spot, use it only as a place to commiserate with standard problems and suggest solutions that could work for them.
4. Extensions for the future, broader impact.  Here’s a place where you can talk up your own work if it is related and can speak to the paper you’re discussing.

How many slides do you want?  Fewer than the number of minutes you have to present.  It is better to go short than to go long.

Special cases:

1.  The authors haven’t actually done anything yet:  Spent the majority of your time on why this is an interesting question and suggestions for future work.  (Also ok to use a chunk of your time talking about your own related work.)  Use the word “preliminary” a lot.
2. The authors clearly haven’t addressed causality but causality needs to be addressed (or any other major elephant in the paper issue):  Spent the majority of your time on why this is an interesting question.  Talk about the problems of getting to causality and (if easy for you to do) what other authors have done and (if easy for you to do) the problems with what they’ve done (or if not problematic, then suggest these authors follow).  Gently mention that causality is something that these authors need to think about.  The audience will understand.  Then suggest future work (which will include really nailing down causality).
3. You don’t get the paper to discuss until the night before at 3am:  Feel free to spend the entire time talking about your own work, or to come up with something off the cuff while they’re giving the presentation (it is AOK to note that you did not get the paper until the night before, but that should be the extent of your dickishness).
4. The paper is poorly done and the results, if taken at face value, will do real harm to people, particularly those from marginalized groups:  In this case, it is ok to firmly and politely destroy the paper for shoddy craftsmanship.  You can do so in a professional manner in steps 2 and 3. You’re still not being a dick, but you don’t have to frame things as questions to think about but as real methodological problems.   It’s ok to throw around the terms “dangerous” and “needs stronger proof”.  It’s a shame that there are still guys (and the occasional woman) who write papers with sexist/racist agendas who ignore basic science in order to prove that wealthy white men are superior and deserve their privilege, but there are.  They shouldn’t be allowed to do bad science.

Academic readers– is this about right?  What things are the same or different in your discipline?  Any other tips?

Minimalism has not caused enlightenment, only mild annoyance

This year, with the exception of children’s toys which seem to proliferate wherever we go (in this case to thanks to decluttering friends), we are living the minimalist life.  Why?  We’re going back to our fully stocked home in less than a year and don’t want to spend extra money on things we don’t need.  We make do.

We have settled down to having exactly what we need and pretty much no more.  What a simple life we are living.  How fortunate we must be.  To cut down to the bare necessities.  Unencumbered by the clutter of daily living in our 2 bedroom, 1200 sq ft apartment.  I could totally start a minimalist blog.

We only have one big pot and one small pot.  We have one big bowl, which means that sometimes the small pot gets repurposed as a mixing bowl for dry ingredients.   We spend a lot of time washing things for immediate use.  Or sometimes we just don’t make the thing because we don’t feel like cooking *and* washing right away.  I’m sure if I were a minimalist blogger, I would write something about how this makes me more mindful and in tune with the rhythms of something or other.  Immediacy.  Sadly, as an economist, my thoughts instead flow to the inefficiencies of being unable to exploit economies of scale.

It is a lie that minimalism saves time.  It is true that having too much disorganized stuff takes time.  But having “just enough” stuff also takes excess time.  Sure it is easy to find our one big pot– it is probably in the refrigerator full of last night’s dinner.  But having to repackage the food and wash the pot before cooking takes time.  And then the repackaging will eventually have to be washed.  One big pot is enough, but it is certainly not time-saving.  Minimalism takes time.

We could, of course, just not cook the second thing until we’ve finished whatever is in the pot.  But again, that does not improve our quality of life, even if it may be ideal from a minimalist perspective. We like a little variety.  The stuff in the pot will get eaten, but not exclusively for several meals in a row.

Minimalism means not having extra.  Not having extra results in sore feet if you don’t replace your shoes quickly enough. It causes you to wear damp clothing when the laundry didn’t completely dry. Or a kid to sleep on an uncovered mattress after an accident. Minimalism requires the kind of time and flexibility that only minimalism bloggers have, because that’s, you know, their job.

While it is great to be mindful about purchases and possessions, cutting down to the minimum is unnecessary.

I suspect most people have an ideal amount of stuff, and when stuff gets cut below that amount, they go on shopping sprees. So yeah, don’t buy stuff you don’t need, get rid of stuff you don’t use, but it is ridiculous to conform to some arbitrary standard that makes your life harder instead of easier.

Link love

History rhymes.  Superman.

Dumb hicks are america’s biggest threat.  Also young men.

Just because we’ve been focusing on anti-Muslim bias doesn’t mean there still isn’t anti-black racism going on.  In this week’s F the police…

Stop blaming women for making less money than men

someone photoshopped a sikh man to look like an alleged paris attacker

No one size fits all diet plan

Eat these animals to protect the environment

Reading self help books may make you feel worse

Why do people give david brooks money to talk about things?

a Haiku

moustachianism in action

Working together makes frugality more fun!

3 ingredient pasta dinners

beeline reader

puppies

Return of the Google Questions

Q:  how to tell inlaws one toy for christmas is enough

A:  Good luck with that.

Q:  what kid of christmas tree do you have

A:  This year… none.  Since we only have a small place, we’re meeting up with my family in a completely different destination over the holidays.

Q:  my husband make more than me does that excuse him from household chores

A:  Only if he uses that money to pay for someone else to do all the household chores (so you don’t have to do any either)

Q:  how reliable is tiaa take the lump sum or monthly check

A:  Monthly check.  (Talk to an unbiased financial adviser who is paid by the hour– keep in mind that if you get an adviser who is at all paid by commission that (s)he will recommend you take the lump sum so that the financial adviser can get a piece of that through fees.  This is a known problem and one that there’s been legislation about that hasn’t yet passed, to my knowledge.)

Q:  do professors have summer office hours

A:  Usually only the ones who teach summer classes

Q:  nick names for grumpy people

A:  Maggie and um… Nicki?  (Ugh, not Nicki)

Q:  can you give someone a money gift and tell them how to spend it

A:  Absolutely.  That makes the check more meaningful.  Like, if you were talking to your SIL about finances and she is saying how she’s been throwing extra money at her credit card to pay off her wedding or she’s saving for a house down-payment or whatever, you can put “for the wedding/house account” on the check.  The trick is, though, that you don’t get to say anything after that.  You don’t get to ask if the money was spent in that way.  You don’t get to get angry if they spent it another way.  So you can say how to spend it in a way that shows you’ve been thoughtful and not just throwing money at it because you don’t know what else to give, but you don’t get to determine how that money is actually spent.

Q:  do professors do their research only in summers?

A:  Some do if they have a crappy teaching or service load.

Q:  why do people choose ugly vertical blinds.

A:  Because they are cheap and they keep the sun out.

Q:  things to make for the inlaws for christmas

A:  Heck if I know.  DH makes things like vanilla extract or rum cake or fruitcake for my father, but my MIL is diabetic and my FIL is picky.  Crafty really isn’t my thing.

Should people exchange gifts at all at traditional gift giving holidays such as Birthdays or Christmas?: A deliberately controversial post

I know we just had a deliberately controversial post, but Mel’s comment got us thinking.  Specifically the parts where she writes:

I guess I don’t really see the point of gifts for adults. Either you have the money to buy yourself something when you want it (or the ability to save to get it), or you don’t but there is the expectation that someone else should spend their money on you for something you want.

Later she adds this about kids:

Our kids are saving all of their money for a big trip when they’re in high school, as Josh and I did when we were starting high school. I want them to have that experience of travel, so I feel okay purchasing toys and such now. Again, I rarely do it on their birthday. It’s more that they express that they want X, and if I think it’s a sound purchase, I get them X. In that way, they are never disappointed.

So that’s actually two potentially deliberately controversial statements there if we add them up.

First:  Should we give gifts to adults at all?

This one is a hard one.  Over the years the number of adults we exchange gifts with has gotten smaller.  We have stuff.  They have stuff.  We’ve moved, they’ve moved, we’ve met a lot of other people with whom we are at the same level of intimacy and we couldn’t possibly give gifts to all of them.  And so on.

DH and I don’t really exchange gifts, but #2 and her DH do.  This partly matches our different financial situations — DH and I share finances and #2 and her DH have more separate finances.  Except DH will often do something for me for Christmas and my birthday– like he’ll do some icky chore we’ve both been putting off, or he’ll buy me something I’ve been wanting out of his allowance (often sleepwear), or he’ll do something that makes me cry like turning my name into a poem to hang on the wall.  I suck at reciprocating.  We also bake cakes for each other on our birthdays.  And it is true that we could do these things at any point during the year, but it really does take one of these standard gift deadlines to, for example, clean out the shower grout.

I would be perfectly fine stopping gift exchanging with DH’s family, though I would have to come up with some other way of delaying purchases given that they have pretty well learned just to buy things off my Amazon list (though DH’s brother always ends up getting me duplicates because he doesn’t buy them directly off my wishlist, and my SIL is especially good at picking things off my list that say “lowest” priority or, the one time nothing is labeled “lowest,” giving me a generic item that isn’t on the list and gets given directly to charity*).  I would also be fine stopping gift exchanging with my sister who refuses to use my amazon wishlist because it is too impersonal and then demands to know what I want instead.

#2 and I have exchanged gifts for many years.  There are three reasons for the gift exchange over the years.  1.  Back when we started we were both poor and I, at least, had a guilt thing about buying myself stuff I really wanted.  So near the end of the holiday season, we would both sweep in and buy books on each other’s wishlists that said “highest”– maxing at just enough to get free shipping.  2.  At other points one or the other of us will be making real money while the other is still in school/unemployed/on leave/etc.  In those cases, the rich one would sweep through the amazon list and the poor one would send thoughtfully curated used books (like Ex Libris or a biography of Dorothy L. Sayers).  3.  Imposing our preferences on the other person.  You will own this book because I say you will.  Mwahahaha.

I like giving gifts.  I like giving gifts that make people happy.  Mainly though, if I’m being honest, I like imposing my preferences on the people I love (or at least who I like).  Gift giving is a time that I can indulge in that whim in a socially appropriate way.  There’s also a small element of charity with some of our gift giving– holidays are a time that we can write a check to badly off family members and they can give us something nominal in exchange (like fudge).

Receiving gifts is a bit bittersweet.  I love getting stuff off my amazon list from #2 or from my family or DH’s parents.  I love getting thoughtful stuff from DH and the kids.  But… we’re doing a lot better off financially than DH’s siblings and I’d rather they kept their money, especially if we can’t give more than we receive in terms of dollar amount.  I just do not understand the large amount of gift-giving that their family does each year.

So I guess bottom-line here is that I don’t know.  Among people who know each other and can afford it, these special times work as a nice way to be nudged into thinking about doing some gift giving.  Some people prefer no gifts at all or prefer to give “whenever” gifts.  But “whenever” gifts can be uncomfortable if they’re extravagant because the reciprocity aspect can be confusing.  So who knows.  With adults, you do you and be gracious about others doing what they do.

#2 says, for me it’s really just fun to give and get gifts.  I have money to buy my own books, but it’s a nice treat when someone buys them for me.  I like finding a gift that fits the person I’m giving it to, something I think they’ll enjoy that they haven’t thought of.  I also find it sweet and wonderful when people donate to charity in my name, particularly charities I support such as kitty ones or child’s play.

Second:

Should we batch up children’s gifts for standard gift-giving holidays (birthdays etc.) or should we give them throughout the year when requested by the child?

This probably depends on the family, but I like batching up the gifts so they’re only given at Christmas, birthdays, and to a small extent Easter.  (Though my MIL does send small presents somewhat randomly throughout the year.)   In the same way that my amazon wishlist keeps me from spending throughout the year, the hope is that getting presents later at specified times will teach them patience and give them the ability to delay their wants when they are older as well.  Anything that they want sooner, they will need to use their allowances on, possibly saving up to buy.

I realize this is an empirical question and I have read precisely zero research on the topic, so who knows.

So there, that’s our second deliberately controversial post about gifts.

*Every year I fight the suspicion that my SIL doesn’t like me and convince myself that it’s just that we have really different tastes.  Every year it is a fight.

What do you think?  Should we get rid of adult gift giving entirely?  Should children get gifts throughout the year or only at specified times?

How to do a powerpoint presentation (social sciences, economics)

I LOVE me some powerpoints.

Think about what you want your audience to take away.  Use the rule of 3 to emphasize those points (say what you’re going to say, say it, then tell people that you said it).  Depending on how much time you have you won’t be able to get through every point in the paper, so think about what subset you want to present, what slides you want to keep in case of questions but not actually present, and so on.

Use the powerpoint as a guide to remind you what to talk about, so brief bullets/phrases instead of full sentences.  Do not read off the slides.

Some people will only want to read your slides, some people will only want to listen to what you say.  Make sure that people who do one or the other will still get the gist of your presentation.

Make sure your fontsize is big enough that the people in the back can see it if they’re wearing glasses.   My heuristic is to not go below 28 point Calibri if it’s something I want them to read.  (Table notes can go smaller)

Graphs are often more compelling than regression output.  (But keep the regression output as a backup)

Don’t use fancy wipes/fade-outs/etc.  Anything that distracts without a purpose is useless.

Development economists, behavioral economists, psychologists, antrhopologists, etc. use a lot of photos/pictures/drawings and occasionally movies.  Do that if it is common in your field.  If it isn’t, then only sex it up like that if it helps improve understanding.

DO NOT USE PREZI.  Or if you do, use it like you would Powerpoint or Beemer.  You do not want to give members of your audience migraines.

I have often found it helpful to have different versions of the same information in the powerpoint that I can skip over depending on how pressed for time I am.  So I will have a pretty chart, regression output, and summary bullets (or two out of the three) and I will use combinations of one or two of these depending on how much time I have left.  It is also helpful to know which sections can be skipped without losing the main themes of the presentation.

Practice your talk.  Know how the talk is going to differ if questions are allowed vs. no questions being allowed.

It is better to go a little under than a little over.  It is better to skip parts than to talk so quickly nobody can understand you.

Join us next Tuesday for:  How to write a powerpoint discussion(!)

Academic readers– is this about right?  What things are the same or different in your discipline?  Any other tips?