Money

I've had several different strategies for dealing with money. I'm writing them out here mostly for reference for myself, though if anyone else finds my thoughts useful that's great.

Initial Strategy

From when I was about 8 and started getting a $1 a week allowance from my parents, through graduation of college, my basic approach was hoarding. I followed the same approach with candy, especially Halloween candy, which didn't go so well. My parents paid for food, housing, education, health-care, and clothing. So pretty much everything left was optional.

In college I started paying part of my tuition. Not that much (about $800/semester), but the amount that the financial aid people expected to come from me. Then near the end of sophomore year, I started going to a lot of contra dances. I didn't really consider money in this. Admission to dances, as well as travel to them pretty quickly became my largest expense after my share of tuition. I continued to have enough money, but not so much as to be unsure of what to do with it.

Justification of Hoarding / Saving

The summer before my last year of college and then during senior year I was working more but not spending more and so had more left over. I wasn't sure what to do with it, but then I learned that julia had student loan debt. So money went to pay that off. Later that year I realized that I should pay back the student loan debt my parents had taken on in my name. So I started paying that back, and will likely have that done by early 2009.

My initial mode of automatically holding on to money had by then come around to a more reasoned justification for the same behavior. I was not going to get into further debt and I would save all the money I could against future need. This 'need' was primarily my own, though I also wanted to be able to help friends or family members if they needed money. So I figured the only sensible thing to do was to continue to save money. I thought some about possible ways of investing it, but at the time I still was paying off debt.

Figuring Stuff out as a Couple

Also in 2008 I was needing to pay more attention to how to deal with that julia and I were getting married and would presumably be combining finances. Julia's view (in very short) was (and is):

There are people in extremely poor circumstances
Valuing yourself and those around you over those you've never met is natural but immoral
So giving away any money not needed to survive is the moral decision.

My view was that this tended to make her quite unhappy, and so figuring out ways that she would be willing to spend small amounts of money on herself was the primary goal for me. This led to a financial compromise:

All money julia earned would be hers to do what she wanted with, which would mean give to oxfam.
All money jeff earned would go to supporting the two of us, with most of the rest saved.
We would each have $30/week of discretionary spending, which was to cover all optional expenses, such as clothes and entertainment. This money could not be hoarded or donated. It could be used to buy presents, but only for people known personally.

The prohibition on donation of discretionary spending was to keep julia from feeling guilty about spending it. As of late 2008 it seemed to be working, though I'm not in her head.

Not keeping all of it

In december 2008, after talking with julia for months and reading some of peter singer's writing, I decided to give away half of what I make. The question of how much I am morally obligated to give is one that I am not sure on, but I can certainly say that the money will be doing a lot of good in oxfam's hands.

Update -- 2009: For 2010, I'm going from giving away half to giving away a third. I didn't think enough about how much of a bite taxes took.

I'm not really sure what I'll figure out about how to value the happiness of people I'll never meet. I'm definitely interested in talking about it. Especially hearing how people determine how much to give.

Idea about percentages

One thing I envy jews and christians is that they have this question partly answered for them. They are to tithe 10 percent. This is nominally the amount one is to give to the church. Some people I know treat this as an amount to give to all charity, others give 10 percent to the church and 10 percent to more needy charities. Structuring giving as 10 or 20 percent of income is appealing in its simplicity. It is also appealing in it's generality: it gives sensible results when applied to nearly everyone: no one is to give more than they can, people who can give more give more, and it's not so large an amount that people will reject it out of hand.

There are two problems with it, though. One is that someone might be earning less than they are capable of. So if I could be earning $70K programming, but actually am earning $16K washing dishes because I would rather do that, then 10 percent goes from $7K to $1.6K. This seemed unreasonable: why should I be able to decrease my moral obligation to help others by switching to a job I enjoy more? This was the stumbling block that had me rejecting percentage systems for a while. Talking to lucas, however, we came up with an alternate way of determining this: take the percentage not of actual income but of potential income. That is, in the case above, as long as the $70K from programming is the most I could be making, I am to give $7K to charity. It wouldn't matter whether I was dish-washing or bumming around on people's couches, I would still be responsible for $7K.

This leads to more problems, however, as one might expect: how do we determine how much someone could be making? I would guess that for most people the amount they are actually making is a pretty good approximation of what they could be making. But only at that time. What if I had gone to law or med school? My salary would probably be higher then, so should I compute 10 percent of those really high salaries you see reported in the news ($160K starting salary for lawyers, etc)? What if I decide to spend some time learning a new computer language that (incidentally) makes me more marketable? Does that increase my potential salary and so also increase my obligation? I'm still not sure how to work this.

The other problem is that if I can live comfortably on what's left over right now, and for some reason my potential and actual wages triple, I end up with a lot more money to spend. More than seems fair. I'm not sure.

Sources of Money

Start	Stop	What	How Much
2rd grade	8th grade	allowance	$1/week
9th grade	12th grade	allowance	$10/week
freshman year	-	student work	~10hr/week @ $7.20/hr
sophmore year	-	student work	~10hr/week @ $7.56/hr
junior year	-	student work	~15hr/week @ $8.01/hr
junior summer	-	work as billing tech	40hr/week @ $12/hr
senior year	-	student work	20hr/week @ $8.56/hr
summer 2008	-	dishwasher at pinewoods	$250/week plus room and board
fall 2008	present	programming at BBN	$65K (2008), $67K (2009), $71K (2010) + approximately 20% more in bonuses and matching 401k contributions

Last modified by Jeff Kaufman: Thu Sep 9, 2010