Why Do We Spend Money on Intangible Things?

Smoking, drinking and gambling — a lot of money gets spent on these intangible things. They’re alternately defined as hobbies and addictions, depending onΒ  who you talk to. You don’t really “get” anything by spending money on cigarettes or alcohol, except trouble in the form of illness, cancer, lost nights and possibly lost relationships. Sure, cigarettes give people some sort of high from the nicotine, while alcohol gives you a buzz, but are these things enough to justify the exorbitant expenses?

Here in New Jersey, cigarettes are up to $8.50 a pack, depending on how much you smoke. Mr. Saver smokes about 10 packs a week, making that $85 lost from our savings each week. And someone who smokes 3 packs a day? At 21 packs a week, you’re talking $178.50 a week, or more than $700 monthly. In NYC, a pack of cigarettes costs even more — over $10, easily. I’ve trying to get Mr. Saver to quit this unsavory habit before our baby arrives, but he’s afraid of weight gain, something a lot of smokers use as an excuse not to give up cigarettes. What’s more, we’ll need that money in our budget to pay for child care.

Drinking is another crazy habit that costs a lot of money, especially for those who go out to bars. Don’t get me wrong, we did a lot of bar-hopping in our day, but I’ve never been a big drinker — I can make a beer last for 90 minutes, easily. But some guys can drink their weight in gold (or cash, as the case may be), blowing through $200 a night on drinks and shots and rounds for other people. One night out a week at that clip, or two nights out where they spend less, and you’re talking $800 a month on booze.

Gambling is probably the most insidious money-suck of the three. You’re putting out your hard-earned money on the CHANCE that you can make it back, and then some. Gambling can be fun, in small doses. Living in New Jersey, I’ve been to Atlantic City, as has my brother, gone to the racetrack a time or two, and my father has an affinity for Keno when he’s down in Maryland. We’ve been to Las Vegas. But we only spend what we know we can afford to lose. It’s when you go expecting to “spend big to win big” that things get hairy. While I’ve been to gambling joints, I don’t really care to lose my money, which invariably happens. That’s why I only gamble about once every 2-3 years. I’m a sore loser! And there are those gamblers who will bet on anything and everything — football, pool games, office pools for March Madness — they just can’t seem to keep money in their pockets.

Don’t get me wrong, seeing anyone spending money unnecessarily drives me bananas, whether on tangible things like $500 purses, video games or fancy cars, or intangible things. But it’s the intangible things that really perplex me. Of course, I’m guilty of the same from time to time, but not at the rates that some people blow through their money, endangering their finances in the process.

Other Costs of Intangible Spending

Besides the monetary costs of smoking, drinking and gambling, there are also the emotional, medical and perhaps legal costs associated with these things. Smokers who develop throat cancer or emphysema require medical care, and stained teeth may need cleaning. It’s extremely dangerous (and, of course, illegal) to drive while intoxicated — not only could you cause an accident, you could be arrested, thrown in jail, or even kill someone else. That leads to legal fees and the loss of your car, which could lead to the loss of your job. Gamblers usually run through their money like water, leaving them destitute, begging money from family and friends, and perhaps hiding their losses from spouses.

What do you think — is spending money on intangibles (cigarettes, alcohol, gambling) ridiculous?

16 comments to Why Do We Spend Money on Intangible Things?

  • Barbara

    I think you mean ephemeral, not intangible…

  • Barbara

    He’s worried about weight gain but not about getting cancer or the damage he’s doing to you and the baby by smoking around his pregnant wife? That’s an addiction.

    • Nicole

      @Barbara: I agree that the potential weight gain shouldn’t be his primary concern. However,he doesn’t smoke in the house or in the car, or anywhere else around me.

  • Wow…$85 a week for cigarettes is an expensive habit. I’ve never smoked but I’m sure it’s difficult to quit. Hopefully he can do it for your little one.

  • I don’t smoke ever, rarely drink and even rarer gamble (and then only the penny or nickel slots). It is not the cause of debt for me.

    Having said that I think regular usage of any of these habits can lead to financial problems and poverty.

  • I guess you could add junk food to the list for sure….. And maybe even cinema, theatre and any form of entertainment that cost if you wanted to go hardline.

    I have never ever taken a puff of a cigarette but I do drink occasionally and I rarely gamble. My vice is restaurants…. Which can be just as bad even though it’s not usually junk food as such.

    From an economic point of view I think intangibles are better than objects. Most objects (extra clothes, weird kitchen gadgets) that we purchase are not needed and often send our money out of country to the company that made the object. Intangibles like these tend to help the service industry rotate and in a weird way provide jobs and heighten social interactivity….. In moderation I think we should spend cash on some intangibles (not smoking though πŸ˜‰ ).

  • I’d have to say if you enjoy it, there’s nothing wrong with it every once in awhile. Of course, you can go overboard too. There’s got to be a good balance.

  • Red

    Smoking: Yes, yes, yes! Smoking has got to be the craziest habit I can imagine. My dad was a smoker before my parents had me. He wouldn’t smoke around me. He’d go outside every time he wanted to, but he eventually gave it up, before I hit toddler age. I guess it’s easy for me to judge because I have grandparents who have suffered awful health consequences as a result of their chain smoking (emphysema and three massive heart attacks). I’ve never touched cancer sticks as a result. Also, I ran the numbers on my grandparents budget, and their cigarettes cost almost as much as my rent! ($400 a month in cigs!) Keep working on Mr. NSF! Maybe he’ll come around! πŸ™‚

    On gambling and alcohol… They can both be okay in moderation. But the problem is that everyone’s definition of moderation is different! Mr. Red doesn’t drink at all, so I go out drinking maybe once a year. The last time was Christmas 2008, and all the drinks were free! And the only time I’ve gambled was the time I pilfered tickets from Mom’s glove compartment. Any winnings I got from her “free tickets” went into more tickets until it dried up. It didn’t excite me the way it does some people. In fact, thinking of what I’d “do if I won the lottery” mostly depresses me because I wake up and realize I’ll never win the lottery! (Especially since you have to play to win! lol)

  • @Jessie and @Nicole: I agree. Moderation is key. I know a guy who smokes 3-5 cigarettes a day. I can see how this guy can have 3-5 pleasurable events a day even though I don’t get the point of smoking at all: sucking smoke into your lungs and exhaling it again. But I cannot see how 20 cigarettes a day can be pleasure. There is nothing in this world that I want to do 20 times a day every day of the week.

    • Nicole

      @Money Obedience: 3-5 cigarettes a day takes willpower, I think. Now think about how someone smokes 60 cigarettes a day — three packs. I know someone who does.

  • I just had the conversation with a client of mine. I asked him why he thought some people were in debt. He blamed it on cigarettes, drinking, gambling and drugs.

    I must admit that I had not thought about it that way even though I’ve worked with numerous clients with debt problems.

    I guess if the person has debt and they have one of those problems they are trying to escape reality.

  • Hmm. I’ve always thought of intangible as being something you couldn’t reach out and touch.

    • Nicole

      @eemusings: You’re right, it’s not the right usage of ‘intangible’ — my point was meant to be that people waste money on things that don’t exist anymore after you spend the money and use them. I suppose that could be said of many other things, such as food or vacations.

  • Although I don’t smoke and I don’t gamble ( even though I live in the gambling mecca of the world) I do spend money on alcohol. And it’s so expensive, especially here! I probably average about 40 bucks a week or so on going out with friends, which is was too much money I think for my income to spending like that.

    I do enjoy drinking in a social setting and there’s nothing like busting out on the dance floor while doing it. If only I could turn my friends kitchen into one. πŸ˜›

    I think the key is moderation. And not spending all of your money on these vices.

  • Interesting things to think about… for me, nothing beats an ice cold beer on a hot summer day. I think that moderation is the key for all of these things.

    • Nicole

      @Jessie: I like to have a glass of wine or two myself, but I was thinking of the crazy folks who go out 2-3-4 times a week to the bars and drop a ton of money. Especially around here, they go to Hoboken or NYC, where the cost of one drink is as much as I pay for a bottle of wine! And it’s much cheaper to grab a 6-pack from the liquor store than go out to a restaurant/bar and pay out the nose.