Mind Over Money. Claudia Hammond
Also by Claudia Hammond
Time WarpedEmotional Rollercoaster
MIND OVER MONEY
The Psychology of Money
and How to Use It Better
CLAUDIA HAMMOND
Published in Great Britain in 2016
by Canongate Books Ltd,
14 High Street, Edinburgh EH1 1TE
This digital edition first published in 2016 by Canongate Books
Copyright © Claudia Hammond, 2016
The moral right of the author has been asserted
British Library Cataloguing-in-Publication Data A catalogue record for this book is available on request from the British Library
ISBN 978 1 78211 205 1
eISBN 978 1 78211 207 5
Typeset in Plantin Light by Palimpsest Book Production Ltd, Falkirk, Stirlingshire
For my sister Antonia and my nieces Florence and Matilda
CONTENTS
Where our relationship with money starts, why money is both a drug and a tool, why we hate to see money destroyed and how it wards off our fear of death
Why we’re so attached to familiar forms of money, why we think coins are bigger than they are, why it’s good to be grumpy if you don’t want to get ripped off and why paying with cash might be better than credit
Why the more an item costs, the more careless with money we are, why we should all use psychological moneybags and how certain budget airlines could have saved themselves a lot of grief
How we hate losing money more than we like making it, how Puerto Rican monkeys helped a researcher understand the financial crisis and why it’s a mistake to choose the same lottery numbers every week
Why a high price is not always a sign of quality, why your brain is a wine snob, why sometimes we’d rather pay more than we need to, why you shouldn’t be fooled by the ‘mid-priced’ option and why you should never open a café called the Zero Dollar Diner
Tips for waiters, why a light touch is best and the problem of the shared bill
How money makes you run to catch that train, why paying children to do better in exams has mixed results, why it’s only worth introducing financial incentives if you can keep paying them long term, and why small payments can help people quit drugs and cigarettes
Why if you pay someone they might be more likely to turn to Playboy in their break, why praise is often a better motivator than money (but don’t overdo it), why you should never pay friends for favours and why the England football team always loses in the penalty shoot-out
Why it’s best not to empty your wallet in front of friends, why a free gift of thousands of pounds can be insulting and why large bonuses might be counterproductive
Why some people have lots, why most of us want more, why enough is never enough and how having more can make you happier (sometimes)
Why being poor can reduce your IQ and lead you to make bad financial decisions, and how you won’t get a lot of sympathy from everyone else
Why rich people would be the first to jump in the lifeboats on the Titanic, why envy is bad sometimes but not always, why we’ll tell lies for money (as long as it’s a substantial sum) and why some people can’t resist throwing money away
Why giving money away (and even paying tax) increases our happiness, why we don’t always like generous millionaires and why charity campaigns might do better with less pretty children
Why speaking German could help you to save more, what Odysseus can teach us about saving and how piggy banks are helping in the fight against malaria
Why, if you want the good life, you should spend your money on experiences not things (while allowing yourself a bit of retail therapy), why buying high-quality prosciutto that you don’t need might not be extravagant and why it’s better not to know your hourly rate
Recommendations for Additional Reading
INTRODUCTION
ON THE EVENING of 23 August 1994, in a small abandoned barn on the island of Jura in the Scottish Inner Hebrides, a fire was burning. Had you stepped inside you might have thought that a newspaper archive was being destroyed. Great bundles of printed paper were alight, sending smoke and ash billowing up into the air.
You’d also have noticed that there was something a little odd about the way the paper ignited. It took a while to catch and then burned sluggishly. Eventually you’d have realised that the paper was denser than the