The Psychology of Money: How a T-Shirt Equals a Taco

Recently, I took a big bag of clothes to a consignment store. Out of the 20 garments I brought in, the store buyer took exactly one shirt.

My payout? $2.18 in cash or $4.00 in store credit.

Since I did not have time to shop around with the $4.00 store credit windfall, I decided to cash out. "I'll take the whopping two dollars and change," I told the cashier dryly.

"Well, that'll buy you a taco," she answered. We both laughed. (See also: The Best 5 Deals in Every Thrift Store)

Other Alternative Currencies

On the way home, I started thinking about the cashier's $2.00 taco. I'd never heard of a taco being used as a unit of measurement before. Which is weird, because I live in Los Angeles where Mexican food as currency seems like a no-brainer.

I started wondering if the cashier is one of those brave bike activists in Los Angeles who doesn't own a car, because the standard Angeleno alternative monetary unit is a Tank of Gas. As in, "Oh, you only made $50.00 at the school bake sale? Well, at least that's a tank of gas."

Then again, it is more likely that the cashier is actually a starving student who is too young to remember when coffee, which has become the new Pizza and Beer of college budgeting, didn't cost $5.00.

On a side note, out of all the alternative monetary units, a Cup of Coffee seems to be the hardest hit by inflation. How many personal finance stories refer to the Latte Factor or use Starbucks' coffee as a budgeting gauge?

A Personal Exchange Rate Is Personal

Everyone has his or her own personal exchange rate. Thinking back on my life as a consumer, my default monetary unit has always been shoe based. (I think Cute Shoes is a common monetary unit with us ladies).

However, when I was furnishing my first house, every single luxury purchase was measured against the Mohair Sofa exchange rate.

I think the reason why I was so taken by the Taco as monetary unit is because it legitimized the value of the $2.18 I had received in exchange for a shirt. I was annoyed that I'd driven down to the consignment store only to return home $2.18 richer. However, because I love tacos, the idea that I could get a quickie snack in exchange for a shirt I no longer liked took the sting from the original cash transaction.

Alternative Currencies as a Budgeting Tool

I suspect that I use alternative monetary units to talk to myself about spending and saving money, because it's somehow easier than just thinking of my expenses without the context of a reward. For example, I used to think of $20.00 as a Bag of Groceries. Since it depresses me that I can no longer buy the same amount of food for one twenty dollar bill, as I once did, I've stopped using a Bag of Groceries as a method of tracking my spending.

Personal Exchange Rates Reflect Personal Values

I wonder what people choose as their alternative monetary unit says about their worldview. For example, my maternal grandmother, who was famous for never having a nice word to say about anyone, had an equally negative monetary unit, the BASSITE. Parking meter eats all your money? "Beats a sharp stick in the eye." Boss promised you a 15% raise at the end of the year but then just gives you a $50.00 gift certificate to Sports Chalet instead? "Beats a sharp stick in the eye."

As if a sharp stick in the eye has any value, to anyone, whatsoever.

Do you have an alternative monetary unit? What do you think your alternative monetary unit says about you? Does your alternative monetary unit help you save money or spend money? Please share your personal exchange rate in the comments section.

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Guest's picture

I value everything in minutes/hours of work done to purchase it. If it is worth an hour or two of my life, then I'll buy it. If it seems like an unfair trade-off, I'll pass.

Max Wong's picture

Hi Ian!

Good for you! Using time spent working as the gauge of what is affordable not only saves money, it also saves TIME. I know so many people who work a lot harder than I do so they can afford to buy more expensive "convenience goods" to help them "save time". It's a vicious cycle.

Guest's picture

This is a really good suggestion to keep you in focus when spending. When I used to have to go to the laundromat, I thought of things in terms of laundry. My sister would laugh at me: "So what if you found a dollar bill on the ground?" I'd say, "But it's a load of laundry!" More recently, I got a Nielsen packet for reporting my TV watching (ironic, as I do not have TV). I started to throw it away, then opened it out of curiosity, and it had $2 in it! Again my sister laughed at me, and I again I pointed out, "Whatever, that's an hour of parking downtown."

Thinking in these terms is a great way to keep your perspective, and it helps when you consider buying a larger purchase. "Sure, I love that artwork...but it costs a month's worth of gas!" Really helps keep your spending on track.

Max Wong's picture

Although I've had my own washer for over a decade now, and I still think of quarters as Laundry Tokens!

Guest's picture

I think it's a great idea to encourage consumers to consider the cost of items in terms of items they use, value and enjoy. Opportunity cost is an eye opener for a lot of people!

Guest's picture

Thank you for this article--it provided a helpful perspective on value & made me think of the lessons in that classic, "Your Money or Your Life." Plus, you talked me out of buying a $73 Horny Toad dress that would probably net $1--if that--should I ever try to do a clothing exchange.

Max Wong's picture

Hi Guest!

I desperately want to see this $73 Horny Toad dress. Is it made out of actual Horny Toads?

Guest's picture

I hate my job. When I am thinking about buying something I will consider how many grueling minutes I would have had to have worked in order to afford this "thing." (sorry, horrible grammar there) That white chocolate mocha costs 1/3 an hour of my paycheck? No thank you.

I usually feel pretty guilty when I buy something for myself. I start thinking such things as, "but I could buy a 15lb bag of cat food instead."

I canceled my Netflix subscription, saving ~$9 a month. That's $108 a year. I'd rather put that into savings and use the library.

Guest's picture

Good article! Never thought of it like this before but I use a vacation/trip as my alternative currency. I used to go to the pub and have a few beers on Thursdays. After all was said and done, it usually cost $25. Multiply that by a year and it's $1300. "That's a good trip!," I told myself so then stopped going. Any time I can find money that will offer me enough for a trip, a past "need" easily turns into a "want". Whether I actually use that money specifically for a trip or not, makes little difference in my mind. ...But rationally, spending a week on a beach in Mexico at an all-inclusive drinking as much beer as a I want easily outweighs the fun factor of going for those beers on Thursdays in my hometown.

Guest's picture

I use this mindset as well, but because everything I own is thrifted it's pretty skewed. As in "Why spend $3.50 on a coffee when I can buy a great painting for $1?"


It makes it hard to spend any money.

Thanks for the though provoking article!

Guest's picture

Sadly, I too connect it to something I'd buy to wear like a shirt or pair of shoes. Not the best thing to do because wasting money on those things is much worse than a tank (or couple of gallons) of gas, or even a bag of groceries. Interesting article though, I think everyone does this whether they realize it or not!

Guest's picture

I tend to think in 'work-hour' units. We're a single income family, so is what I'm buying worth putting my hubby through X hours of work for it. And since I actually like having my hubby at home, often the answer is, "I don't like it that much"!

Guest's picture

I value most things in terms of a week's worth of groceries, which is about $50-60 for my family of about-to-be-five. (I live in an expensive part of the country, where milk is often $4.00 a gallon at regular grocery stores, but I can squeeze a dollar until it squeals!)

My second value is, like Ian's, time. Is my purchase going to be worth the time that it takes to earn the money, go out and buy it, and then use it? If not, I'm not getting it!