Why we’re all so weird about money

By Caitlin Kelly


Few issues are as fraught with emotion as how we get, spend, save or give away our money.

If you don’t have enough to survive, every day becomes an emotionally and physically exhausting battle.

And when you live in a country devoted to bare-knuckled capitalism like the United States, if you don’t have enough, the social safety net is weak and thin.

The federal minimum wage is still an absurd $7.25 an hour — I’ve never paid any of my part-time assistants less than $12 an hour, even 15 years ago.

American unions now have the lowest membership in a century, even as one third of American workers lurch into what’s now widely and risibly called the “gig economy”, a jaunty and inaccurate euphemism for fiscal insecurity.

This week Richard Thaler just won the Nobel Prize for Economics.

From The New York Times:


Professor Thaler’s academic work can be summarized as a long series of demonstrations that standard economic theories do not describe actual human behavior.

For example, he showed that people do not regard all money as created equal. When gas prices decline, standard economic theory predicts that people will use the savings for whatever they need most, which is probably not additional gasoline. In reality, people still spend much of the money on gas. They buy premium gas even if it is bad for their car. In other words: They treat a certain slice of their budget as gas money.

He also showed that people place a higher value on their own possessions. In a famous experiment, he and two co-authors distributed coffee mugs to half of the students in a classroom, and then opened a market in mugs. Students randomly given a mug regarded it as twice as valuable as did the students who were not given a mug.

This “endowment effect” has since been demonstrated in a wide range of situations. It helps to explain why real markets do not work as well as chalkboard models.

Money is so often a proxy for other, often deeper, darker issues: power, control, status, humiliation, (why Hollywood power broker Harvey Weinstein could be a sexual predator and so many people who relied on his goodwill to help them get or stay rich remained silent for so long.)

I’ve been fairly obsessed with money for a long time.

It’s caused no end of drama within my family and I’ve been handling my finances alone since I was 19 and moved out of my father’s home to live alone in a large city and pay for university from my earnings as a writer and photographer, with a small monthly income from a grandmother.

It taught me very early to know my worth and to bargain hard for it. I still remember the joy of earning 18 percent on a Canada Savings Bond, whose value quickly doubled.


One place I do spend money freely — travel


I also remember vividly being so strapped then that it took me months to save the $30 I needed to buy tights and slippers so I could attend a free ballet class.

My living expenses were phone/rent/tuition/books/clothes/groceries/answering machine.

No car. No TV. No cable.

My family has plenty of dough, but made clear to me to never ask for a penny of it, nor ever expect to run home for help. I inherited some money from my grandmother in my mid-20s, which helped me to to buy an apartment, a security for which I’m very grateful as I’ve bounced in and out of the job market, survived three recessions and work as a full-time freelance journalist — an industry now in complete chaos.

I break into a sweat when spending money on more than the basics; (except for making our home lovely and travel.)

My cellphone and computer are probably four or five years old, (no big deal.)

But our Subaru has 180,000 miles on it, is 16 years old and cost us $1,800 in repairs in recent months — so we’re finally about to lease a gorgeous luxury vehicle.

The thought of committing to anything beyond our monthly health insurance and mortgage payments is scary even though we have the cash, (money we’ve saved for years), and emergency savings, so this is not — as Thaler would nod knowingly — 100 percent rational thinking.


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Airfares? I’ll splurge on those…


Some of the financial challenges I see so many women struggling with:

1) being scared to ask for more (i.e. raises, bonuses, negotiating a higher salary or fees)

2) giving money and gifts to children and grand-children to their own financial detriment

3) under-earning because of sexism, racism or other institutional barriers

4) under-earning while taking time away from paid work to care for children and/or others

5) failing to understand the devastating financial impact of divorce and planning for that. I had a prenuptial agreement in my first marriage and could have ended up in very dire straits without it.




Does handling and managing your money cause you anxiety?


18 thoughts on “Why we’re all so weird about money

  1. Not so much any more. It used to. I spent a chunk on the ex-narcissist to get rid of him and prior to him had divorced a wealthy husband but I certainly didn’t leave with more than I had when I arrived. I am now paid very well and am making up a lot of ground, in spite of having recently experienced five months of unemployment (that was scary).

    A very informative post that women should really pay attention to. 🙂

  2. It used to cause me a lot of anxiety. I’m in my late 40’s and I feel like I’m just now figuring out how to budget well, plan, save, and all that business. I wish I had learned this 25 years ago.

    1. I suspect it freaks many of us out, for so many reasons.

      I was essentially shamed when I spent a lot of money on myself by my parents (who were loaded) so that certainly had an effect. And losing jobs in the American economy was sobering so I had to save money when I had it to save.

      I’m glad you’re getting a handle on it now. Better now than never!

  3. Ach. Divorce. I’m a highly educated woman who is good at what she does. But divorce took a bite out of me. It’s something none of us want to talk to women about before they get married. But as a result, most of us and up paying for that if divorce does happen. You make some hugely valid points, as usual.

    1. Thanks…

      I was lucky (?!) having a maternal grandmother who’d had six or eight husbands, most of whom she chose to divorce (she had $$$$.) Her daughter, my mother, who divorced my Dad, also cautioned me — as a Canadian marrying in the U.S. — to protect myself just in case. Thank heaven she did.

  4. how very interesting – yes, money has caused me anxiety at various times in my life and now it is much easier, though i do worry about the future with regard to money. at this point, in the middle, i can pay my bills and have a bit to give or enjoy doing the things i choose to do some things that are extras, and i am grateful for that.

    1. I think once we get past basic survival , it actually gets more complicated — we have to save for the future but we want and need to enjoy the present as well.

      We’re also not close to our families, so we’re not spending money on travel and gifts to multiple relatives, as many people do.

  5. Carolyn

    When I was younger, I did worry that if my marriage broke up, how would I survive? I had a teaching degree and that would pay okay if I were to go back, but supporting 3 young children would be challenging. I don’t have that worry now after 32 years of marriage and 3 grown children, although the youngest just lost her job due to NASA budget cuts and now we’re helping her until she finds another job. Now my financial worries are different..My job is secure and I’m well paid but I have many medical expenses and have just been approved for medical marijuana, which is very expensive. The monthly cost of that is a mortgage payment, as opposed to $7/month for a bottle of percocet which has managed my pain for the last 6 years quite effectively. So, we will try this for a few months, but I’m not sure it is an answer for the long term. It will definitely cut into retirement savings and may cut into my ability to work. Fortunately, through all we have weathered together, my husband is supportive and is willing for me to try anything if it will help. I don’t know what I would do without him by my side. If not for my medical issues, we would probably be comfortable for the first time in our lives!

      1. And it gets me perks. Next month, I’m going to the ballet on tickets I bought with hard earned money. And on Monday, I’ll be able to buy tickets to see Phantom of the Opera when it comes to Columbus. I’m really looking forward to it.

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