Sunday, December 20, 2015

Money Won

It's the week of Christmas, and instead of deciding on thoughtful gifts for my friends and loved ones or contemplating on the birth of the world's savior, I am agonizing about which runningback to start in the flex position. Yes, it is another fantasy football post and, yes, technically this is still a personal finance blog, but just barely. As long as I somehow connect these ideas to money in the next five minutes, I think I still get to attend FinCon next year.

So I'm in two different fantasy football leagues this season, which is actually cutting down, for me. As a full on fantasy addict, I was in as many as five different leagues some years. But these days I only keep the two that keep me in touch with my buddies back in San Diego. While these leagues are really just excuses to call my friends more often during the fall and winter, they also have the added benefit of possibly paying for our Christmas presents and the chance to lord a victory over my buddies for the next twelve months.

This year, I'm lucky enough to be in the playoffs in both leagues again. If I win either game this week, I'll be in the championship game, and in black for the year. Each league pays $600 to first place and $300 to second, so we'll make some decent coin regardless of what happens next week, if I can win today.

What will we do with the winnings? Mrs. Done by Forty is eyeing this Saddleback bag. So If I want anything left over for myself, I better win both leagues. If that happens, I'm hankering for an Xbox or a PlayStation, mostly so I can finally play Madden again. I haven't played since I was in my twenties, but I remember it being a great way to waste a few hundred hours.

It's oddly fun to think about spending this money, the cash won from gambling. It is different than the paycheck I earn from my job, or the returns we might get from investments or from our rental properties. Winning from gambling feels uniquely like found money: something that falls out of the ether like manna, and really ought to be spent frivolously, if at all possible. While most of our money is tracked and budgeted and applied in a logical manner, found money is "extra" and is a chance to splurge a little, without hurting our savings goals.

This makes no sense, of course. All money is fungible so it doesn't matter where it comes from. In a coolly rational sense, any money ought to be applied to our bills and our goals regardless of its source. If we want to retire by such and such a date and need X savings rate to get there, we should probably put that percentage of all funds into our investments.

But I don't want to do that with my fun money.

When I start compartmentalizing money from different sources into separate buckets, I'm engaging in mental accounting. That's why money from my paycheck is grown-up money that ought to be earmarked for the mortgage and investments, but the check I get in a birthday card from my sweet old aunt goes to drinks at happy hour. It's also the reason that I want to buy a new scooter every spring when we get a tax refund, even though we already have two and, seriously, who in the world needs three scooters?

But as many mistakes that mental accounting can get us in to, the funny part is that mental accounting sometimes works in our favor. Put some money in a savings account labeled, "House Down Payment" and, poof, magically it's less likely to be spent, even though it's just as accessible as the money in your checking account. Same with my contributions into my IRA. It's my money and I can take out my contributions (just not the growth) any time, tax and penalty free. But hardly anyone does that, even people who might overdraw their checking account from time to time, because we've created the mental account of retirement savings.

Mental accounting, sometimes, also saves us our most valuable resource: time.
"The alternative to having mental accounts, Thaler said, is to consciously ask yourself to ask what every purchase is worth and compare it with every other purchase. Is a latte worth the same as a pair of socks? Just as your boss doesn't want to be bothered with trivial decisions on whether you charge the company $20 or $22 for a meal, you don't want to waste time thinking about trivial purchasing decisions."
When I create a $30 monthly budget for coffee, that mental account allows me to easily buy the occasional latte without having to spend time wondering if those four dollars would be better used in a retirement account. While on paper it's neat to think about how money is fungible, and any dollar could be applied to any number of potentially optimal choices as we approach maximum frugality, in reality, that practice is exhausting. People, or at least the two people who live in our household, do better having a budget for certain categories, and then trying to spend within that budget. It simplifies things, and keeps me from spending time pondering where each five spot ought to go.

But back to fantasy. The early games have started, and twelve hundred bucks are on the line. If we get lucky, I might just get to buy my wife a fancy five hundred dollar bag. Yeah, it's a pretty absurd amount of money to spend on a glorified briefcase.

But even if we spend it, luckily it won't hurt our savings goals anyway. The money's extra, fallen from out of the ether, and really ought to be blown on something nice that we wouldn't normally buy for ourselves. Maybe that's why money won is twice as sweet. It allows us to have some nice things, some little luxuries, without feeling guilty. Mental fallacy or not, that is worth something, too.

*Photo is from futureshape on Flickr Creative Commons.


  1. Wait... I thought you were morally opposed to gambling. Is there some sort of exception for fantasy football? :)

    BTW - congrats on your Steelers win... I wasn't really expecting to win that one, but the first half made the second that much harder to take! sigh.

    1. Hey, no pointing out my hypocrisy in the comments section. :)

      I do think there's something a little different with gambling friends do together informally, like a poker night or a fantasy football league where all the money stays within the group of buddies, and something formal like a lottery/casino run by a government or a corporation. Maybe I'm splitting hairs, but one feels different to me than the other.

      The Steelers got VERY lucky in that game, both in being able to adjust the defense at halftime, to Brock getting hurt, Denver's missed extra point, and in getting away with that late INT. I can confidently say that I do not want the Steelers to travel to Denver for a rematch. That defense is for real, and some other poor team can go to Mile High to try to steal a win.

    2. Ha! Well, you're being much kinder than any of the sportscasters here in town. They're ready to throw somebody under the bus, they just can't quite figure out who!

      Anyhow, sorry for teasing you about the gambling thing. I hope you win big in your fantasy league and do something fun with the money. :-)

    3. I ended up winning both leagues, so we're definitely winning at least $600 or so (probably a bit more with some side prop stuff). If we win both leagues next week, it'll be over $1200 and then I can play video games. I find this very motivating.

      As for the Denver sports coverage, I went to Denver for the AFC Championship in 2005. I remember the day after, the sports coverage was fairly in shock over what had happened: not that many people thought the Steelers would pull off three road wins in a row. Honestly, I just remember feeling bad. Denver had it's own magical season going with Jake, and very well could have beaten Seattle handily in the Super Bowl, I think.

  2. I've been reading the gambling exchange between you and EcoCatLady, and I can't decide which side I'm on: the side of "gambling with friends is okay" or the side of "morally opposed to all forms of gambling". So I'm just going to shut up and wish you a very Merry Christmas. :-)

    1. Merry Christmas to you, too, Laurie!

      That sort of within the friend group gambling is my very favorite kind. I have fond memories of playing poker for coins growing up, throwing a few bucks in a cup for home run bets at baseball games, and for a few hundred bucks with friends in a fantasy league. Informal gambling is certainly still gambling, but heck, you really can't play poker at all without gambling...and what is a world without poker. :)

  3. Congrats on the FF wins, I was literally agonizing as I watched Cam Newton and Antonio Brown destroy my chance at the championship. The good news is our league is spread out a little and I won the regular season and have a chance at 3rd, both of which win money.

    I think anything you put money into with the chance of not getting that money back and the possibility of winning more money back is gambling. I prefer to think of FF as controlled gambling and that's what I participate in. I don't mind putting up $50 for 16 weeks of fun and entertainment with my friends. I also am not opposed to gambling in a general sense, but I prefer to have controlled gambling.

    1. Playing for 3rd is still great as, you mentioned, you still have a chance at some cash. Good luck this week, Steven!

      I agree that it's still gambling, but I do think there's a key difference. It's like how buying raffle or 50/50 tickets at charity events is technically gambling. But since the money goes to a good cause (or to friends) rather than a corporation, I think the spirit of the endeavor is different.

  4. Nice work! I am still in my FF playoffs this week, but prolly not for long as I face Cam. Hope he throws to Ginn as I am hedging my opponent by playing him...and yes this is a money league. I am sure you agree that the money is nice, but it doesn't last as long as the bragging rights, muhahahahahha!

    1. Cam went absolutely crazy last week (had him in one of my two leagues) and pretty much guaranteed victory for anyone who started him. Here's to hoping you beat the odds though.

      Agreed on the bragging rights. We finally got a perennial trophy for my oldest league, which goes back to the 1990s back in the paper and pencil scoring days, and mine is the first name on the trophy. Win it again, and I think I can name it after me, ala Lombardi. :)

  5. I'm probably nearing "hardened gambler" territory if I'm honest with myself (about 15 years of gambling, a lot of it medium/high stakes) so clearly don't have *many* moral issues with it :)

    What do you object to about gambling against a company rather than friends just out of interest? From a personal point of view I quite like going up against "The Man" and trying to win some of his money back, although I obviously do realise that if I do win, it will really be coming out of someone else's pocket and not really the company's. Maybe someone who really couldn't afford to lose it. Which I guess is what the moral objection is, but be good to hear your particular thoughts on this.

    I'm on the line with it, I think that companies can and should do more to restrict clear addicts or those that are in desperate money troubles. Having said that is there really much difference between this sort of thing and Credit Card companies who rip off those in bad money situations with the highest interest rates? It's clearly not black and white, as nothing ever is!

    Anyway I am waffling now so will say good luck with your finals week and I hope Mrs DB40 gets the leather handbag she desires! :)

    As a side note I wonder if your view on the whole "gambling with friends is ok" thing would be different if you were on the side of a 5 year losing Fantasy Football streak, rather than it being a nice little earner for you? ;)
    (I jest, I jest!)

    Cheers and Merry Christmas, all the best for 2016


    1. Hey Firestarter. I think EcoCatLady was referencing my old post on the state lottery, which I have a lot more issue with than any sort of casino or sports book:

      To be clear, my issue with the state lottery is that it has a terrible negative expected return on a ticket, and that it's run by a government that generally outlaws gambling of any other sort. The kicker is that governments have a mandate to help its poorest citizens, who generally are the ones playing these games disproportionately.

      I don't begrudge someone who's doing well financially from placing a bet on a sports team, or going to a casino, if that's what they want to do. I'd just prefer that governments stay out of that kind of business, both in the organizing of gambling and the outlawing of it.

  6. Sorry more waffle from myself. I feel I should actually comment on the point of your post which raised a very interesting phenomenon!

    I very much used to do exactly as you do, whenever I got a big win I would treat myself and the Mrs to something. (Part of) the reason we ended up getting engaged in fact was because I got a big win and I could finally afford a half decent ring and a trip to Mexico to "do the deed"!!!

    However all that really meant was that my gambling ended up like a savings account, because all of the small losses would all added up, like paying a smaller amount into a monthly savings account, and then when I got a big win it would get blown, aka making a big withdrawal from the savings account.

    This kinda works OK as long as you are overall not losing too much money (preferably winning, of course!), but the thing is there is no structure to it so you cannot really save for a particular goal using this method, as you don't know when the big win is going to come. So with no goal in mind, often the big win just gets blown on something you really didn't need.

    Since getting into this whole PF malarkey though I did stop gambling for about a year but have recently gotten back into it and now all winnings are going into a "baby fund" so there is a much more disciplined approach and it ticks the box of something solid to save for, so I think this new mindset will work out a lot better for me.


    1. I love that your gambling is going to a baby fund. That sounds like a plot for a funny movie.

      There really is something different with money won, mental fallacy or not. For someone who is probably a little too frugal, as my typical reader tends to be, and I'm right there, too, it's not such a bad thing to have some money that's meant to be blown. Or at least that's my take on it.

  7. Congrats on making it to the playoffs in both fantasy leagues. I am also in two fantasy leagues (down from 3 last year). I made it to the playoffs in both leagues as well but was eliminated in the first round in one leagues last week. I have one league left with a 2-week championship game. If I win, I will take home $800 and free entry next year from ultimate loser. However, if I lose, I get nothing as it is a winner takes all league.

    Wish me luck, cheers to fantasy football finals! AFFJ

    1. Good luck! $800 is a nice pot, though the winner takes all sure makes for a tense day of football today. I'll be pulling for you.

      What do you want to do with the winnings if you take home the trophy today?

  8. Although it is a mental fallacy, it's a useful one. We must engage in some level of mental accounting (ie budgeting) or we would consistently be overwhelmed by the choices we have to make, and we would make even worse choices.

    I put gift money into a seperate pot from all other money because I view it as a license to blow the money on something like a dozen chipotle burritos if I so desire.

    1. A dozen Chipotle burritos sounds like such a good use of winnings. The wife and I split a chicken burrito as our go-to, and I think it's a fantastic value at $7 for the two of us. Mmmm, Chipotle.

      Great point about the necessity of mental accounting. I remember an old MMM post a while back about how he does not budget and just lives a life of constantly trying to be as frugal as possible, and I thought, man, that sounds awful and exhausting. I can't imagine constantly re-evaluating purchasing decisions like that.

  9. We totally do mental accounting in terms of buckets. Any hustle money we earn goes directly to savings. Haven't gambled in a while... I think we went to the casino for my birthday actually. Because I literally had zero ideas on what to do. I earned my $20 back and quit. I'm a much bigger fan of the friendly poker game.

    I have no idea how today panned out for you, but I'm pretty thrilled. Let's go, Buffalo! And I can't believe how close our own game was...

    Hope you and the Mrs had a merry Christmas! And please come to FinCon!

  10. but wait, London ... gambling ... thats ok, what's wrong?

  11. Susan, that's interesting to read, but, according to, we clearly can see, that yo're right.

    Railey, yes, London is opened to gambling, but in special places.

  12. yep, this post is interesting. hoping on the Christmas this year, you can do it again, of course if you like