I find that the study of one’s emotions can create interesting opportunities for enlightenment. This past week I noticed something odd about mine, and have been trying to see what I can take from it to improve my game.
Typically I am an opportunistic manufactured spender. I think that the hobby is suck on time and often creativity, as the acts themselves are often mundane repetition. That said, there is some fun to be had in cracking or reverse engineering a gig to learn the core of it. A great example of this in action for me is grocery shopping.
For reasons that I still haven’t figured out I shop very inefficiently. I find it hard to shop for more than a day or two of meals at a time. Perhaps stemming from the size of my refrigerator when living in Japan, or just because I am a weirdo. As such, my typical grocery shopping bill will range between $20-40. The good part of this is my local store also sells gift cards that I can buy and make $20 on. They have a 1 card limit, so it ties in nicely to my frequent shopping trips.
Happy with the ‘earn’ transaction
I have caught myself thinking (and saying if shopping with the family) that we just saved $20 off the bill, so if we want to slip in something nicer to the basket, such as steak, or crab or whatnot, its OK, because we subsidized it. And I do think that is just fine. I wouldn’t bother going out of my way to get that gift card to not enjoy it. There is an emotional feeling of success and joy for acquiring the card and then an attachment to ‘treating myself’ to celebrate the moment.
Double Celebrations?
There’s nothing wrong with being happy about things. But I’m worried about creating lifestyle inflation and counting things ‘double’. Yesterday I caught myself doing this. I was slapping myself on the back for liquidating a large amount of spend at a store, and started running the math in my head. I figured I’d just earned say $200 in a transaction, and then I thought, plus the $20 from yesterday, and I was over the moon… money was flying in.
But if I’m celebrating (and spending) the money on the earn side of the coin, and also again on the burn side, my emotions may be getting me into trouble. You might see this when you are earning cash and points.
Cash earning is always a net positive – EG, you giftcard at 5x nets you $20. Points earning is ‘almost’ always a net negative, with a couple of notable examples. However, many people will use the cash earned to offset the fees attached to the points.
Drilling into the emotional side
If we consider the gift card emotion, that shouldn’t create a feeling of joy. What actually happens is that we are buying a card that promises to give us some points (cash) in the future. But right now we create liability. As I waddle out of the grocery store with $540 of spend, including a nice duck for dinner, I run the risk of dropping the card, it being drained already, or simply being unable to unload. But I’m happy!
The joy seems to be attached to the moment of acquisition, in this case. And I think that is what is happening at the liquidation side too. We get the emotional driver of acquisition again. I have ‘acquired’ money orders, or something else. But if all I am acquiring is good feelings, then that is where the problems start.
The associated problems
By allowing our emotions to only be ‘positive’ and ‘happy’ I think we might be at risk of glossing over the real accounting that takes place during the game. We might not be overly concerned about ‘acquiring’ a new card because it gives us so many new things, and we ignore the new annual fee. We might also lose the upside created in earning on a new card by enjoying and marking the event with a celebration twice.
It will be hard to measure the impact of this, but it might be worth tracking your emotions next time you spot a card in the wild, and how you feel when you unload it. Did you close the loop, or did you earn X on both occasions?
Great post. Manufactured spending can be somewhat addicting. Personally, I get a little satisfaction in each step that gets me closer to the final phase of actually earning and redeeming the points/miles/cash, but I don’t get that feeling of relief until the process is over. However, if I didn’t get some enjoyment out of the process I wouldn’t do it at all. Most of us aren’t making a living doing this.
I only am pleased when I’m walking out the door having exchanged plastic for a check or a payment. Until then, there’s a lot of potential risk (what if store policy changes and I can’t cash out, etc etc).
Getting points/miles/cash is great, but just as big a pleasure is knowing the banksters are finally being taken advantage of, albeit in a puny way compared to their massive scams.
I too get a bit of a rush on both sides – especially if I have scored some GCs using CCs in a store that doesn’t always accept them, or if I bought a lot.
But then, like Paul, I don’t feel as elated in the middle, since I always have a niggling concern that I may not be able to unload them as easily as I did last week, or yesterday, or the last time I unloaded. Rumors about changes in POS terminals or store policies increase that feeling; I don’t worry about the float and know I can always just use up the GCs for regular spend eventually, but I really want to be able to close the loop and go back for more.
Then elation sets in once again when I successfully unload.
However, I never treat myself to something special because I made money in CB. I just brag at dinner about how much money I made at the grocery store that day 😉 !
I find myself mildly relieved when the transaction goes through for the initial purchase of the gift card or whatever I’m purchasing, the feeling of excitement and accomplishment doesnt come until the money is safely back in my bank account and ready to be divided up to the various CC companies to bring my balances back to 0 and close the loop just to start again and figure out just what the next move is.
Spending those $10/$25 coupons for buying $100 VGC’s is like that. I need to be very careful to remember they are really $4.05/$25, with a $5.95 prepayment baked in.