At
this time of year when excess spending is the norm, here
are some monetary facts that might brighten your spirits,
or at least enlighten you during those holiday spending
sprees:
-
How much cash is there in America? In November 2003, the
"M1" money supply (which includes all coins, currency
held by the public, traveler's checks, checking/savings
account balances, NOW accounts, automatic transfer service
accounts and balances in credit unions) was $1.25 trillion.
That is on the order of $4,257 for each of us.
-
The U.S. Secret Service was originated in 1865 to combat
counterfeit money. There was a time when as much as one-third
of all the money in America was counterfeit. The Secret
Service estimates there is currently about $32 million of
counterfeit currency in circulation in the United States.
-
U.S. currency is not printed on paper, but on cloth: three-quarters
cotton and one-quarter linen.
-
A mile of pennies laid out is $844.80. By this standard,
America is about $2.5 million wide from coast to coast.
-
Parker Brothers has printed more money for its Monopoly
games than the Federal Reserve has issued in real money.
-
A check is merely an IOU, and IOUs can be written on anything.
Someone once wrote a $15 check on an eggshell. The recipient
took the eggshell to a bank in Canada, where it was cashed
like any other check.
Spending average rises
-
According to one report, Americans spent an average of $1,395.06
per family on holiday gifts in 1984. Another report puts
it at $5,580.25 per family in 1989 (The Wall Street Journal,
December 1989).
-
In 2002, the American Sociological Review estimated that
4 percent of our annual income is spent on holiday presents.
Median household income was $42,228 in 2001, according to
the Census Bureau. That means holiday presents will cost
an average of $1,689 per family. In New Jersey, the average
is $67,914, yielding $2,717 in holiday presents.
-
Americans send 3 billion holiday cards a year. If you have
the average number of friends, you should get at least 12
a year.
-
The average person spends 148 hours per year waiting in
lines, more so in December than any other month. If you
could be paid just minimum wage ($5.15 in Colorado) for
those 3 1/2 work weeks, you would receive $762.20.
Your
money and holiday shopping
Research
has shown that music influences not only how much time people
spend in a store, but also how much time they think they've
spent in a store. It can even help promote one type of product.
A
study in a British supermarket on how music could affect
wine sales revealed that when the store played French music,
people picked up more French wine. When the store played
German music, Gewurztraminer sales rose.
The
holiday shopping season offers innumerable examples of this
kind of not-so-subtle musical message. It's almost impossible
to go into a retailer in November or December and not hear
carols designed to get us into the gift-buying mood.
Automated
wallet may curb waste
Research
affirms that individuals think about their purchases differently
depending on whether they use cash, credit cards, debit
cards or checks.
They
also put a much higher value on something they already own
than on the same thing if offered for sale. This "prospect
theory," which won the 2002 Nobel Prize for professor
Daniel Kahneman and cited his research partnership with
the late Amos Tversky, helps explain why people hold on
too long to losing stocks or pay way too much to insure
themselves against small losses.
MIT
Sloan School of Management Professor Dan Ariely and his
graduate students are experimenting with an "electronic
wallet" that would advise users on how best to spend
their money. For example, your wallet may run a Monte Carlo
simulation displaying how, based on your payment behavior,
you would save $150 in the next three months by using cash
for a purchase instead of your Visa card.
In
other words, tomorrow's technologies will load the dice
in favor of people not repeating the sort of silly statistical
mistakes that lead to Nobel Prize-winning research.
And
that will merit a prize of its own.
