How much money does your neighbour have?

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Hold that question in your mind, and let's talk about how the goddess of Money is out to get you.

In ancient Rome, there was a goddess Moneta, who was deciding which of her children should manage her affairs while she was away spreading her doctrine throughout the world.

She gathered her three immortal daughters Antonia, Balbina and Cornelia, who she affectionately referred to as A, B and C.

“Daughters. I am travelling far and will be gone many years. I leave you each 20 cows. Show me what you can do while I am gone”.

After 20 years Moneta returned and called her daughters to her. She saw that:

Daughter A had grown the cattle to a herd of 150.

Daughter B had grown the cattle to 300

Daughter C had no cattle. Nothing to show. All the cattle were eaten, and it was clear she would suffer a terrible eternity. She sobbed “It hurt every time I ate a cow, I could see my herd dwindling. I am so ashamed to not have a single cow left”.

“Disaster!” said Moneta. “This time we will start again, and we will use the gold coins called 'Money' that I have created. I leave you all a pot of gold. I’ll be back in a few years. I want the whole world to use MONEY!”.

But Moneta got busy, as her gold coins took off and money spread throughout the world and was worshipped by all. When the whole world was in thrall to money, and all the old gods had died and withered away and only Moneta was left, she returned to Mount Olympus. Several thousands of years had passed. The daughters were nowhere to be seen, so she ventured back to mortal earth to find them.

Daughter A was found living in a modest house, and living a modest life

Daughter B was found living in a good house, and living a good life

Daughter C had flourished. She was living in a mansion, driving an expensive car, covered in jewellery. Her neighbours envied C’s success, and had bought themselves a better car and more jewellery in a desperate attempt to keep up.

Moneta gathered her daughters. “And what of the pot of gold I gave you?”

Daughter A said “mother, I give you back your pot of gold and can show you my vault – I have lived a modest life on the interest on the gold. I own 10000 pots of gold apart from yours”.

Daughter B had spent more of the gold, but again handed her mother back one pot of gold and showed Moneta to the vault where 5000 pots of gold lay.

Moneta turned to Daughter C, and said “Cornelia! I have seen all your wealth, and I am very impressed. Lead me to your vault!”

Cornelia replied – “”yeah, I’m a bit maxed out this month mum, so can I owe you for the pot of gold? Do you take VISA? Amex?”

Moneta was both appalled and delighted. Her daughter was broke, but her mission to make money a part of human lives was a success. 

The moral of the story? We can no longer SEE our neighbours’ wealth.

Wealth, and therefore saving, used to be visible. Your neighbours could see that you were wealthy, because they knew that your land stretched to the sea, and your thousands of cows grazed the land.         

Now, we live in a world when saving is hidden, and spending is visible. You used to know how much money your neighbours had. Now all you know is what they spend. Do they wear nice clothes? Drive a nice car? Have a fancy kitchen? You might think that they are doing well, but just like Cornelia, they could be broke. As Shakespeare once wrote "all that glisters is not gold"

One of the real problems with money (and in getting people to save) is that we’ve stopped it being painful to spend money. Our wages go into our bank accounts, and our cards pay our bills. If you had to take out your mortgage payment or rent in cash every single month and hand it over, you’d probably pay a lot more attention to the value you’re getting – and whether it’s time to get a better deal.

The same goes for gas, electricity – any direct debit which comes out of your bank account without you having to be involved.

Make it less painful to spend, and people spend more.We’re so removed from the concept of money now that we almost don’t consider it real. Technology has advanced society in so many ways, but it has also created a disconnect between us and money. It has made paying so easy, we don’t even feel the pain anymore. On Amazon, we just click the button and the book is on its way to our front door. In pubs and bars we just tap with our phone or card. We don’t need to take our wallet out and physically count the money anymore.

Once upon a time before money, we bartered. I'd be even more aware that I’d be trading my bread for your apples.

We’ve moved from spending physical objects to cash, and now to digital money. The way we spend no longer involves a physical component. Contactless cards mean you don’t even have to enter your pin. YOU DON’T EVEN HAVE TO LOOK AT THE SCREEN!.

Paying, as well as saving, has become invisible.

If you’re a trying to help people save, think of a way to make achieving their goals visible.

And if you’re trying to get them to part with their cash, take the pain of paying away, and make it as easy and frictionless as possible.

 

[This parable was inspired by Dan Ariely’s latest book “Small Change: Money Mishaps and How to Avoid Them”. Go check it out. It might just make you richer.]

Hannah LewisComment