This past weekend I went into “the city” (i.e. NYC) for a friend’s birthday and the place he chose was this trendy bar which was set up as a speak easy.  All drinks were served in tea cups with saucers, the beers were served in brown paper bags or mugs if it were a draft.  The entrance was just a random gate on street with a large but unassuming bouncer in front of it.  Being that it was in The City and it was trendy the place was not cheap by objective standards; I bought 2 rounds of 4 drinks/beers and it cost me $84 with tip ($7 beers and $10 – $13 drinks), but I wasn’t mad, upset or frustrated.  I had a fantastic time and the other guys also bought a couple of rounds.

Fast forward, I get home around 2a.m. go right to bed.  Wake up Sunday Morning, play with the boy a bit, do some family stuff, go look for a suit, regular Sunday errands that is until…I went to fill up my car.  I take my normal mid-sized sedan which was nearly empty (light was on ) to the gas stations.  I filled up my car buying a little over 15 gallons of gas for a $4.13/gallon for a grand total of about $63.00!  SIXTY THREE DOLLARS?! I was fuming.  Fuming.

Why was I angry? I would be getting more utility and use from the gas then a couple drinks?

I compartmentalize Spending

According to wikipedia,

Compartmentalizing is the act of splitting an idea or concept up into (sometimes more or less arbitrary) parts, and trying to enforce thought processes which are inhibiting attempts to allow these parts to mix together again. This process is performed in an attempt to simplify things, and to defend against anxiety…Often, ‘when the individual is confronted with the contradictions in behavior, thought, or affect, he/she regards the differences with bland denial or indifference’.

Psychiatrist Robin Skynner suggests the ‘simplicity…[of] splitting everything into neat compartments of “good” and “bad” does several things for us, all of which make us feel better. First, it helps us feel part of a “good” group – that’s comforting. Second, we can relax our usual standards of correct behaviour for a bit… And third, we can let off steam, that is, get rid of our own “bad” feelings on to the “baddies”‘.

Well at least we don’t have to have the discussion if I compartmentalize I am clearly justifying my spending decisions to avoid anxiety, but I don’t just do it here.  I will agonize over finding the most efficient use of my money when it comes to lets say a cell phone plan, but then not care if I spend triple digits on dinner for two.

As a side note, I can’t pronounce the word which is frustrating when I tried to test this post out on friends and The Wife.

Is Compartmentalizing Spending Decisions a Good or Bad Thing?

As with all things in personal finance I am going to say it depends.  Horrible answer, right?  If you are compartmentalizing in such a manner where it is allowing you to justify spending decisions way beyond your means then it is obviously terrible.  Are you the type of person that can put the $1,200 MacBook Pro in one box within your head because you “need it” but struggle to make minimum payments on your credit cards.  Maybe you should try to force yourself to look at money as “one pot” and that all decisions affect other decisions.

Alternatively, are you the type of person that can’t have a good time because of the money you know you are spending without compartmentalizing? Does it cause you anxiety when you just think about spending a large amount of money (which is all relatively obviously), or when you frivolously spend money even if it is a small amount? Then maybe compartmentalizing is a good thing.

Do you Compartmentalize spending? Is it a good thing or bad thing for you?

Photo Credit: Kevin Mullet