No longer updating

It's a shame, but I'm no longer updating this website. Busy setting up new ventures.

I'll leave it up for anyone who's interested.

Thanks to all regular readers, and all the best for the future.

Cheers, PJ

Youth money thoughts

Anyone can learn about money.

Anyone can help anyone else learn.

Making mistakes doesn't mean you're hopeless.

Managing money is a lot about relationships & understanding other people.

Good financial education is not about turning people into more savvy consumers.

Good financial education starts with young people's interests and builds on their strengths.

Inside money

Stop buying presents (maybe)

An economist who has analysed gift-giving isn’t impressed. “An orgy of value destruction and misallocated resources,” is what Prof Joel Waldfogel, author of Scroogenomics, calls it.

The problem is that when we buy for ourselves we have, or ought to have, a reasonably good notion of what the value is to us compared with the price. If something costs £30 we buy it only if we consider that it has at least £30 worth of satisfaction to us, preferably more.

That breaks down when it comes to buying for others. We don’t really know what other people like or what they already have. So there’s a risk that the recipient of our gift wouldn’t value it as high as the asking price. Of course, we could be lucky and get it right. But more likely we won’t. We could use our hard-earned cash to buy something that the recipient would not have spent a penny on.

That’s the problem that Waldfogel identifies. He’s costed it as a waste of $25 billion a year.

So what do you do instead? Gift cards is one answer. But given that only 90 per cent of them get redeemed, that’s an awful lot of waste too. And when retailers collapse, as Comet did recently, they can become worthless.

So is it back to unromantic cash? Perhaps. But Waldfogel does give an element of hope. Buying presents for people you know well is much more likely not to be a waste. The real problem comes when buying for people who you see seldom and don’t know very well. So then the advice boils down to making sure you ask your Gran or distant relatives for cash. But you’d probably figured that out anyway.

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