Money & Mind
Money is interchangeable and almost nobody treats it that way
Mental accounting — sorting money into separate notional pots — leads to decisions that are internally…
· 3 min read
Varun Krishnan
Editor, Dollars & Decisions
Varun writes the explanatory pieces on spending, saving, debt and would rather show the working than assert the conclusion.
13 articles
Spending
A unit price is the only way two package sizes can be compared
Comparing headline prices between different quantities compares two things that are not the same, which is…
· 3 min read
Saving
A balance says very little until it is set against what is owed
The figure in a savings account is one side of a household’s position, and reading it on its own can make…
· 3 min read
Debt
A missed payment costs considerably more than the payment
Falling behind triggers charges, changes the terms available and starts a cascade, which is why the useful…
· 3 min read
Investing Basics
The horizon is the variable that constrains everything else
How long money can be left alone determines what can sensibly be done with it, more decisively than…
· 3 min read
Spending
Depreciation does most of its work early, and that is what a second-hand buyer is buying
The steepest part of an item’s loss of value happens in its first stretch of ownership, which means the…
· 4 min read
Debt
A guarantor takes on the whole obligation and receives none of the money
Standing behind someone else’s borrowing is a legal commitment to repay it, which is a much larger…
· 3 min read
Investing Basics
Owning a share means owning a claim on what a business earns later
A price on a screen is easier to watch than the thing it refers to, which is a fractional stake in the…
· 3 min read
Money & Mind
Owning something raises the price you would accept for it
The same object is valued more highly by the person holding it than by the person considering buying it…
· 3 min read
Spending
A shopping season is a deadline somebody else set for you
Concentrated sale periods and calendar occasions work by attaching a date to a purchase that had no date of…
· 3 min read
Debt
Some borrowing has an end date built into it and some does not
Instalment credit is designed to finish and revolving credit is designed to continue, and that structural…
· 4 min read
Investing Basics
A home you live in is an unusual asset to hold in a portfolio
Property that a household occupies is concentrated, illiquid, expensive to transact and often bought with…
· 3 min read
Money & Mind
Two people arguing about money are usually arguing about two different rules
Partners rarely disagree about arithmetic; they disagree about what money is for, and until that is said…
· 4 min read