HomePersonal FinanceDo You Compartmentalize Spending Decisions Also?

Do You Compartmentalize Spending Decisions Also?

This past weekend I went into “the city” (i.e. NYC) for a friend’s birthday and the place he chose was this trendy bar which was set up as a speak easy.  All drinks were served in tea cups with saucers, the beers were served in brown paper bags or mugs if it were a draft.  The entrance was just a random gate on street with a large but unassuming bouncer in front of it.  Being that it was in The City and it was trendy the place was not cheap by objective standards; I bought 2 rounds of 4 drinks/beers and it cost me $84 with tip ($7 beers and $10 – $13 drinks), but I wasn’t mad, upset or frustrated.  I had a fantastic time and the other guys also bought a couple of rounds.

Fast forward, I get home around 2a.m. go right to bed.  Wake up Sunday Morning, play with the boy a bit, do some family stuff, go look for a suit, regular Sunday errands that is until…I went to fill up my car.  I take my normal mid-sized sedan which was nearly empty (light was on ) to the gas stations.  I filled up my car buying a little over 15 gallons of gas for a $4.13/gallon for a grand total of about $63.00!  SIXTY THREE DOLLARS?! I was fuming.  Fuming.

Why was I angry? I would be getting more utility and use from the gas then a couple drinks?

I compartmentalize Spending

According to wikipedia,

Compartmentalizing is the act of splitting an idea or concept up into (sometimes more or less arbitrary) parts, and trying to enforce thought processes which are inhibiting attempts to allow these parts to mix together again. This process is performed in an attempt to simplify things, and to defend against anxiety…Often, ‘when the individual is confronted with the contradictions in behavior, thought, or affect, he/she regards the differences with bland denial or indifference’.

Psychiatrist Robin Skynner suggests the ‘simplicity…[of] splitting everything into neat compartments of “good” and “bad” does several things for us, all of which make us feel better. First, it helps us feel part of a “good” group – that’s comforting. Second, we can relax our usual standards of correct behaviour for a bit… And third, we can let off steam, that is, get rid of our own “bad” feelings on to the “baddies”‘.

Well at least we don’t have to have the discussion if I compartmentalize I am clearly justifying my spending decisions to avoid anxiety, but I don’t just do it here.  I will agonize over finding the most efficient use of my money when it comes to lets say a cell phone plan, but then not care if I spend triple digits on dinner for two.

As a side note, I can’t pronounce the word which is frustrating when I tried to test this post out on friends and The Wife.

Is Compartmentalizing Spending Decisions a Good or Bad Thing?

As with all things in personal finance I am going to say it depends.  Horrible answer, right?  If you are compartmentalizing in such a manner where it is allowing you to justify spending decisions way beyond your means then it is obviously terrible.  Are you the type of person that can put the $1,200 MacBook Pro in one box within your head because you “need it” but struggle to make minimum payments on your credit cards.  Maybe you should try to force yourself to look at money as “one pot” and that all decisions affect other decisions.

Alternatively, are you the type of person that can’t have a good time because of the money you know you are spending without compartmentalizing? Does it cause you anxiety when you just think about spending a large amount of money (which is all relatively obviously), or when you frivolously spend money even if it is a small amount? Then maybe compartmentalizing is a good thing.

Do you Compartmentalize spending? Is it a good thing or bad thing for you?

Photo Credit: Kevin Mullet


  1. I’m 100% guilty of this. I don’t bat an eye at spending $25/per week at Starbucks, but become enraged when I spend $20 for allergy medication. Even though the allergy meds, for less than $1/per day will bring me relief for a month, it still gets me angry. Yet, I happily fork over $5 a day for over priced coffee. I’ll wear jeans until they have a hole big enough to be determined to no longer being socially acceptable, and then be angry that I have to get a new pair – all while not caring about paying $8 for a sandwich at lunch. Something is wrong with me.

  2. Are you compartmentalizing or rationalizing one expense versus another. I think it is more of value statement! You may feel you receive more value for a Starbucks latte than the price of gas. If you look at the cost of the latte versus the cost of gas, you should be more annoyed about the price of the latte. The latte provides more pleasure or value to you than gas. Start with the concept of getting the most for your money before you spend it. Maybe carpooling or public transportation would be a better solution to the high cost of gas.

    • Interesting…You think it is rationalizing? I don’t think it is because I am not comparing 2 like things and choosing the more expensive one nor am I even blaming the drinks on “needing to have a good time.” Just expressing my inner rage

  3. I agree with Matt. At Banana Republic outlet recently, I tried to buy a cardigan, and I thought it was 70% off when it was only 60% off. It was $20 for the cardigan in total.

    When the cashier rung it up, I told her I didn’t want it.

    I don’t bat an eye paying $20 for two bottles of wine when a cardigan can last me much longer than that.

    I ended up sheepishly going back to buy it.

    It all doesn’t make sense. Perhaps its human nature??

  4. I do this all the time, but it helps me make wiser choices. I think of things in terms of airplane tickets. Do I REALLY want two pairs of jeans for $300 or do I REALLY want a plane ticket to Boston? Does a cup of coffee every day for a month really equal a tank of gas? Hmm….

    • I agree with you! I think it helps me more than hurts, but I can easily see how it goes the other way for some people

  5. I do this when we go out to have fun. Sure, I can have a bottle of beer at home for $1 instead of $5. I think it’s OK to let down your guard once in a while and have fun though. I do the same thing when I go on vacations. It won’t be any fun if I worry about every pennies. A ticket to New Zealand cost over $1,000. That’s a lot of money, but if we over analyze it, we wouldn’t go anywhere.

    • Woah you have been New Zealand? That is fantastic. Farthest I have been is Greece.

      When we were there The Wife would get so pissed at me b/c I would convert the Euros to Dollars for her…and she said she didn’t want to care lol

  6. I think we all do this, even those of us who are personal finance bloggers.

    Recent example from my life: I went to Vegas this month with a group of guys who didn’t want to gamble at the tables. I lost less than $30 for the whole trip and was the biggest spender. Really. They threw nickels around like they were manhole covers.

    Yet, everyone spent $400+ on airfare getting there. Go figure.

  7. I would say that everyone, if they are truly honest with themselves will admit that they do this. We like to spend money on the things we get joy from and hate having to pay for things that we don’t like or get much joy from. Great post.
    It really made me alert to my spending.

    • Thanks Miss T. Maybe it really is a simple as “We like to spend money on the things we get joy from and hate having to pay for things that we don’t like or get much joy from.”

  8. I had the same problem before, I selflessly drink with my mates and always we had a great fun for the rest of the night but the following day some guilt takes over and it happens every time! Just got over it with sharing just like you did! Thank you so much for sharing your experience.

  9. I’d have to say that I do compart– compartmen– , split up the idea of purchases into different categories. I don’t mind spending 80 bucks on a night out but spending that much on gas would make me gag. I think it’s also the value or pleasure that is derived from the spending. more fun equals less of a heart attack.

  10. I think I compartmentalize my spending in regards to the money spent for the kids or household vs something for myself. I won’t even flinch if I need to spend $50 or $60 dollars on something the kids need or even $100 for something we need in the house but I cannot spend even a $5 on myself without feeling guilty or having anxiety over spending the money.

  11. Although understanding this concept is a bit of a stretch for me, I can definitely say that I’m the type of person you describe as not being able to have a good time when I know a certain item or activity costs money.
    I feel guilty going to expensive dinners (sometimes even out for fast food), buying nice clothing, or even going to the movies. Usually I prefer staying home to watch something on Netflix rather than going to the see a movie at the dollar theater, just so my husband and I can save the $6.00 (plus tax).
    I suppose that means I feel like compartmentalizing can be both bad and good. On one hand, you’re not blowing through your money, but on the other, you don’t know when to enjoy it.
    Great post, really interesting point of view!

  12. Great post Evan!
    My wife and I try to compartmentalize our spending by giving ourselves a monthly budget for everything, eating out, entertainment, shopping, bills, etc. When you have your spending budgeted, it makes it easier to enjoy whatever it is you’re spending your money on. For instance, when we want to go out for a really nice dinner, we don’t feel bad about it because we’ll keep the rest of our month’s spending for dining out to a minimum.
    Thanks for the read,

  13. I think budgeting leads to compartmentalizing and that’s a good thing. I make my budget so that I can sit down and see the whole picture and weigh this purchase against that saving goal. Once that’s done, I don’t have to feel guilty about spending on anything because I’ve already decided that it’s what I want to do with my money.

    I spent $40 on sandals the other day and I don’t feel guilty, because it was already in the budget. On the other hand, until recently, gas prices were annoying me because it meant I was likely to blow my gas budget. I spend freely where the money is budgeted, but I get mad if something makes me go over or costs more than I want to budget for.


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