By
Beth Kobliner
One of the biggest concepts in behavioral economics these days is the role that “choice” plays in our financial lives.
Sounds obvious, but it’s the simple idea that we have a finite amount
of money, so we need to choose wisely how we spend it if we want to
live a life that we consider good.
But what really is the “good life?”
In
August’s Journal of Socio-Economics (yes, I confess that I read it for fun!) there was an intriguing book review of
How Much Is Enough? Money and the Good Life by R. Skidelsky and E. Skidelsky, a father-son team—the dad: an economist; the son: a philosopher.
In the review, researchers Benjamin Nienass of Yeshiva University
(New York) and Stefan Trautmann of Tilburg University (the Netherlands)
outline those factors that the Skidelsky team believe to make up the
good life:
“Health; security (low uncertainty in life); respect; personality
(autonomy); harmony with nature; friendship (community, social
capital); leisure (goal-less activity)…”
I thought this was a compelling list. Certainly more thoughtful than
beef tacos and beer on a Sunday afternoon while watching football—many
of my friends’ notion of living the good life.
But the reviewers then go on to say that this one-size-fits-all
definition may not really be right. They argue that everyone’s view of
the good life can be varied, and you can’t really account for the
trade-offs that people are willing to make in such a list.
“A doctor,” the reviewers write, “ who feels called to help people
may be willing to work 60 hours, sacrificing leisure and family life.
Will he subscribe to this definition of the good life?”
This got me thinking about my own upbringing and the choices that my
parents made in order to give us their version of the good life.
As I mentioned in
my last column,
my parents were frugal in a good way. They made smart decisions about
spending money that allowed them to live the life that they wanted to
live.
We certainly did not have everything we desired, but we definitely had what we needed.
Though they were careful with cash, they didn’t scrimp on those areas
that really mattered to them. Healthcare was number one—damn the cost.
We saw the very best doctors even if we had to go outside the network
of my dad’s healthcare plan. (Of course, 20 or 30 years ago, healthcare
wasn’t nearly as expensive, but it was still a big cash outlay for my
dad, an educator, and my stay-at-home mom.)
Weighing Priorities
Another priority: living in a comfortable home. That’s not to say
that they didn’t hunt around for the best sale price on furniture or
appliances. They sure did. (I recall many a Saturday evening trudging
through a mall or department store as we compared prices on big-ticket
items.)
But they believed that buying a quality refrigerator or a
well-designed central AC system was incredibly worthwhile—even though
buying such higher priced items was not routine in most families in the
‘70s.
Their logic—and mantra: We spend 365 days a year—minus a small, local
family car trip here or there—in our modest home, which should be our
family’s comfortable refuge.
Read the full article online.
