Tags: Spend | Money | corporate | budget

It's Easy to Spend Other People's Money

Thursday, 14 Mar 2013 09:48 AM

By Jackie Gingrich Cushman

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As a corporate budgeter, I learned decades ago that only a few people can look at an organization's money, corporation's money, or someone else's money and spend it as if it were their own money, i.e., very deliberately, based on the priorities and values of the organization.
 
One of my favorite memories from my time as a corporate planner occurred when an organization, which was not meeting budget, rented horses to ride on stage for an internal employee meeting. King Arthur lived again!
 
Aligning priorities and budgets has never been hard for me. Possibly it was my childhood experiences: wearing my sister's hand-me-downs from grade school until I became taller than her and starting my work life at age 13 cleaning bathrooms.
 
Possibly it was my college experiences: working at the switchboard (yes, we still had one where I went to school), working one or two jobs during the summer and cleaning my car (or my friend Suzanne's) to find enough change in the cushions to go to Fast Fare (the local drive-through restaurant).
 
As a planner, I spent other people's money as though it were mine. I constantly asked myself: How could it best be spent? Did the strategy and budget align?
 
This week, I conducted an unscientific economic experiment using my two children. We went to Chick-fil-A after school for a snack, which we do about once a week, and instead of paying for their food, I explained that we would split the cost.
 
Most times, the two of them finish the chicken sandwich and nuggets portion of the meal, but often leave half-eaten fries, drinks, and shakes. As a child of the "clean-your-plate" generation, who still too often does just that (hence my use of salad plates for dinner; I'm thinking of moving to saucers), I did not want to require that they eat everything that they ordered, but I wanted them to have some skin in the game.
 
My son Robert decided to get a small order of fries instead of the medium, no drink and a small ice cream cone, as it was less expensive than the shake. My daughter Maggie decided to just get the chicken sandwich. She ate the entire chicken portion of the sandwich (which was the norm), but also the pickle and the bun. In order to get the most out of her money, she threatened to eat the wrapper, too, but thankfully decided she was full.
 
My unscientific conclusion: It's always easier to spend other people's money. After all, if the money belongs to someone else, then there are no real consequences to how it's spent. You don't have to determine if you really need a small order of fries or medium — just get the medium. And go ahead and get the medium shake, too, just in case. When faced with choices that have consequences (you can spend either here or there), then one tends to allocate limited resources more efficiently.
 
Scarcity is the restraint that leads to allocations that reflect priorities.
 
If restraints are taken away, then real decisions can be avoided.
 
So I have a confession to make: I've changed my mind. Last Friday, I tweeted that Eric Bolling's and Sean Hannity's offer to pay for the White House tours was excellent. The government-funded tours were canceled effective this past Saturday due to the sequestration, according to the White House website.
 
Robert and I toured the White House last month. We also toured the Capitol and the Supreme Court. My new perspective is that government is paid for by the American people (and corporations) and therefore the key government buildings should be open to the same people who pay for them to be operating in the first place.
 
While a private payer might allow the White House to stay open, doing so would artificially remove a constraint on how our (not the government's) money should best be spent.
 
Based on my experience in budgeting, I feel pretty sure that, somewhere in our federal government, horses are being rented for members of King Arthur's Court to ride upon — if not literally, then figuratively. Before the government buildings are closed to the people who fund them, we should first round up all the theoretical horses and those who ride upon them.
 
We might just find out that the emperor who rides the horse has no clothes.
 
Jackie Gingrich Cushman is the co-author, along with her father, former House Speaker Newt Gingrich, of the book "5 Principles for a Successful Life: From Our Family to Yours." Read more reports from Jackie Gingrich Cushman — Click Here Now.



 
 
 

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