Ask Ariely: On Fun Money, Santa, and Feeling Old

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.

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Dear Dan,

My parents, both over 60, have retired from careers in government service, with good retirement funds plus a decent monthly pension. When they were young, they faced a lot of financial difficulties, so over the years, they have turned into misers. They don’t go on holidays, dine out or indulge in any way; they buy substandard groceries, take public transportation to save on gas and fret over even petty expenses. I want them to enjoy the rest of their lives without such worries. What should I do to change their behavior regarding money.

—Vivek

Your parents’ problem comes bundled with substantial benefits. Saving early in life and living modestly are key to a healthy retirement, and I wish that more people in the U.S. behaved this way. You probably owe much of your own financial well-being and your mind-set toward money to this exemplary behavior.

That said, now that your parents are comfortable, it would be good if they were able to enjoy life to a higher degree. If I were you, I would sit with them and go over their monthly balance sheet to try to figure out how much money is coming in every month and how much they are spending on necessities.

With these numbers in hand, I would look at how much extra income they have every month—and call these funds “fun money.” Next, I would get them two prepaid debit cards and set up an automatic monthly transfer of the fun money from their checking account to the cards. In this way, the fun money will be set aside from the beginning, with a different physical identity and declared purpose—a little like chips in a casino. If you want to further drive the point home, put large red stickers on the cards and write “Fun” on them.

Finally, for the first few months, you could go over the statements with them to make sure that they are indeed spending the money in ways that make them happy.

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Dear Dan,

Do you think it’s acceptable for parents (and society in general) to lie to young children about the existence of Santa? I don’t, but I seem to be in the minority.

—Charlotte

My research center recently completed a documentary on dishonesty in which we interviewed individuals who had committed misdeeds, from insider trading to doping to infidelity. Many people, we found, take one wrong step, then rationalize it, then take another—and soon they’re on a slippery slope.

All of which is to say: It is wrong to lie to kids about Santa. You might start with a fib about Santa, but next it could be the Tooth Fairy, and after that, maybe it’s Superman, the Avengers and who knows what else.

More seriously: Your children will find out at some point, and when they do, it could cause a loss of trust that could be very unhealthy.

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Dear Dan,

When I was a teenager and my parents were in their 40s, they seemed old to me. Now I am almost 40, and I still feel young. Is it true that we stay young for longer these days? In the 21st century, when do people start feeling old?

—Nina

Despite our amazing advances, we don’t stay young for longer. The difference is your perspective. We look at ourselves as the standard, paying less attention to differences that we consider positive and overemphasizing ones we see as negative. As for your question about when we start feeling old, that’s simple: We start feeling old when we look forward more to a good night’s sleep than to a night of passion.

See the original article in the Wall Street Journal here.