Why is money so hard?

On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer a question asked by Vox readers, which have been edited and condensed.

Why is money so hard?

Dear Letter Writer,

You asked this question at the beginning of the year; now that we are coming to its end, I may have an appropriate framework through which to answer it.

The literal answer is that money is difficult because it is a representation of value. Unfortunately, we are often unable to earn and spend our money according to what we actually value. Various industries are motivated to pinpoint the exact minimum amount of money we’re willing to accept for various jobs and the exact maximum amount of money we are willing to pay for particular items, trusting that we’ll give them exactly what they ask for. Much of what is left over goes toward experiences we don’t actually value and expenses we can’t necessarily control.

The metaphorical answer is a little more complicated:

It is the holiday season for many of us, a time when we demonstrate our values to one another. The person who values frugality shops the sales, the person who values extravagance shops full price, the person who values their own skills handcrafts ornaments or puts calligraphed labels on jars of jam — but no matter what you choose, you generally end up spending an unusual amount of time or an unusual amount of money. 

Most of us pick the money route, and even the people who choose the DIY route have to purchase the Mason jars and calligraphy pens. So we set budgets — some of us, anyway — and divide our holiday shopping lists into affordable allotments. This much money for gifts, this much money for clothing, this much money for travel, and so on.

At this point, if we’re thinking practically, we book the travel first. Somehow it costs more than we were expecting, even if we set aside more money than we did last year. This is because the airlines, rental car companies, and hotels understand that reaching a particular destination for the holidays is a top-level value in nearly everybody’s minds — a value that is taught and reinforced by much of the media associated with the holiday season, as well as societal expectations — and these companies can charge precisely what the market will bear.

So we end up booking the flights or the rental cars or the hotel rooms, or we look at the cost of gas and estimate how much it might cost us to drive, and whether it would be possible to pack a cooler instead of stopping to eat along the way, and then we tell ourselves that we can always make our budget balance by spending a little less on the presents.

Except we don’t want to spend less on the presents. We want to let the people we love know how much we love them, and the amount we love them hasn’t changed since we booked our flights, so why should the amount we spend on their gifts have to decrease? We don’t want our families to have to bear the burden of an inadequate budget. We don’t want to face disappointed children or disapproving relatives. 

And so — because we value the people we love, and because we very much value the idea of ourselves as generous and holiday-spirited — we spend more than we can afford.

Sometimes this overspending comes from what might be considered a necessity. This is the year to give your child a bike, for example, because next year might be too late. However, many of us quickly get into the kind of overspending that is less useful. This would be the “well, we’re giving Nana three gifts, so I had better make sure Pop-Pop has three gifts too” thing, the kind of financial imprudence that leads to comically unnecessary novelty purchases or the dregs of drugstore sales bins. 

Nobody wants these gifts, and yet we feel as though they ought to be given, and so we exchange money we cannot afford or have not yet earned.

There’s another level of overspending that occurs when someone else tasks you with a holiday responsibility you weren’t expecting. This year, your team is doing Secret Santa. This year, you got invited to a themed party that requires you to buy an ugly sweater or a silly hat. This year, Nana and Pop-Pop want everyone to send in family photos so they can make a calendar. This year, your neighbor gave you a gift, and so you had better give them something too.

And so we spend, and spend, and spend, and tell ourselves we’ll sort it out later, maybe we’ll get a raise or pick up a side hustle or apply for a 0 percent intro APR balance transfer credit card — because that’s what we’re supposed to do at this time of year. Everything in us and around us tells us to book the travel and buy the presents and attend the parties and take the pictures, and if we don’t enjoy all of this as much as we ought to, or can’t afford to spend as much as we want to, we’ve failed.

That is why money is hard, dear Letter Writer: Because the way we spend the holidays is the way we spend our lives.

Fortunately, New Year’s resolutions are just around the corner. This year, consider resolving to understand both what you value and what value you have to offer. From there, you may be able to improve the rate at which you exchange your value for money and exchange your money for what you value. It’s the only way through this mess of personal finance, and it isn’t easy — but I’ve done it, and other people I know have done it, so I hope you can too.