THE ROUGH GUIDE TO PSYCHOLOGYby the same team showed that the more money participants were left
with after a game of Monopoly, the less likely they were to help pick
up pencils dropped by a passer-by, and that participants primed with
money-related sentences subsequently opted to donate less money
to charity than did control participants. Vohs thinks that reminders
of money have this effect because money allows us to achieve goals
without the help of others.
More recent research has reinforced the idea that money can reduce
our enjoyment of life. Jordi Quoidbach at the University of Liège led
a 2010 study in which being wealthier or being presented with the
mere sight of money led people to spend less time savouring a chunk
of chocolate and reduced their enjoyment of it. Quoidbach’s team
concluded “our findings provide evidence for the provocative and
intuitively appealing – yet previously untested – notion that having
access to the best things in life may actually undermine one’s ability to
reap enjoyment from life’s small pleasures”.
Mental accounting
Imagine that you earn a modest Christmas bonus of a few hundred
pounds. You wouldn’t normally consider spending that kind of money
on a meal out, but – bonus in hand – you suggest to your partner that
you dine out together at an exclusive restaurant. “After all,” you reason
to yourself, “this is money that I wasn’t expecting to have.” It’s almost as
if you’re suggesting that the money contained in the bonus is somehow
less valuable than the money that you earn week in, week out.
People often take a similar attitude with money saved in sales, money
received as a birthday gift, or money represented in store-card loyalty
points. Instead of recognizing the face value of the money, our judge-
ment is skewed by its provenance. The ten pounds off that dress, or the
twenty-pound birthday gift, are seen as fun money, unconstrained by our
usual frugal consciences. The five-pound time-limited voucher earned
through the loyalty-card, on the other hand, is seen as extra precious –
we’ll go to great lengths to make sure we don’t miss the chance to cash
in this well-earned “free” money.
This idea of carving up our money into pots of contrasting value is
known as mental accounting. It can provoke us into some particularly
irrational financial decisions. One costly example is when people leave
a savings account untouched while paying off a loan. Invariably, the
interest charged on the loan will far exceed the interest earned on the