Can funny money be worth more than real money?

Funny money can be found in the form of points/miles/cash like points/resort credit and whatnot.  Interestingly, the default approach to valuing ‘funny money’ is that is worth less than real money.  Logically, this makes sense, as the money must be used within a closed ecosystem, whereas real money possesses that fungible nature that crosses borders.

But what funny money possesses that real money does not, is the ability to free ourselves of the boundaries set within our minds, often stemming from our upbringing.  For example, let’s look at one of the offers I received that came with funny money:

Vegas

3 nights in a suite, $800 in resort credit or 3 nights in a nicer suite and $400 in credit, or 3 nights in a super nice suite, and $300.

I talked about this in the forum, and because it is such an interesting topic (to me) I’m bringing it up again as the crux of the ‘power of funny money’.

If I elected the $800 option, what would that weekend look like?  It would require me to live differently in order meet the goal of spending the money, since, just like real money ‘you can’t take it with you’.  With real money, there is always that fear of future need.  Can you afford to order the most expensive steaks in the restaurant, or room service champagne and chicken wings?

If I went with the $300 version of the offer, I would absolutely not spend $800 on food at the restaurants where the credit was available.  I might still have a fancy meal, but likely I would also have a cheap one mixed in.

At times like this it is important to remember that real money has a reason and purpose.  It’s purpose is to be converted into something other than money.  We face psychological challenges when it comes to this, and it is very hard for people to spend money, especially on luxury items if they have spent their upbringing being taught frugality, and have saved consistently.

Funny money enables the feeling of freedom to spend, because the unnaturally short life span of the opportunity makes even the most prudent person say ‘screw it’.  With $800 in credit you might order the $100 steak, or the $200 bottle of wine, heck you could even order a $800 shot of aged whiskey, something that many millionaires would never consider doing, but something that they could all actually do.

So when someone says ‘I value $800 of funny money at $400 of real money’ or some such other valuation, you have to think about what that really means.  That person will never order the $800 shot, never experience a $800 ticket to a sold out event.  Some might say that missing out is ok, but I’m not sure that is always true.

Remember, life is to be tasted, breathed in, and lived, yet being an adult comes with responsibilities to people beyond yourself, and therein lies the balance we must strike.  We can be serious about taking care of our financial responsibilities and future obligations, but don’t allow that to encroach into the wonderfully liberating experiences that ‘funny money’ can provide. Don’t be so fast to discount it to a ‘real money’ value, since it can enable you to do and experience things that you will not allow your real money to do. Based on a set of rules and regulations that you’ve adopted over the years, that limit how you can see the world.