Expectations and Your Money

I started Set expectations low-ish
Little did I know that I wasn't just being environmentally conscious and frugal: I was smartly setting expectations low for my gifts. A professor at Yale University's Center for Customer Insights conducted a study in which he discovered that pretty packaging raises the receiver's expectations — and decreases the receiver's pleasure with the contents of the package. In an interview on American Public Media's Marketplace program, Nathan Novemsky summarized:

“…one of the interesting findings was that if you wrap a gift, you raised people's expectations and the liking of the same gift goes down. If you wrap a gift that, you know, is really just meant to be a little something, it might behoove you not to wrap it — or if you are going to wrap it, to not wrap it so nicely.”

The principal at work here, that I'm calling expectation bias, is not just appropriate for Christmas gifts, but for just about anything that involves an initial impression of an experience. Professor Novemsky used the example of a nice, complimentary glass of champagne that a fancy restaurant brings you before the meal. “If you're setting expectations high and you're not delivering on them,” he says, “you're going to be worse off than if you hadn't tried to set expectations at all.”

Lower your expectations, increase your happiness.

The prettiest package
I found this at work at a recent food swap. Inspired by a frugal friend, I've been attending these for awhile now, and I love analyzing the items that “sell” and those that are the last to go. There's always a trend item (this month it was drinking vinegar and caramels; in the summer it was jewel-colored jellies and raw milk ice cream) that will find its dance card overflowing with eager swappers. And then there's the prettiest package.

Assisted by my sister-in-law, I found pretty little bottles for my pine syrup (pine needles chopped and simmered in honey and water), tying them with twine and including handwritten card stock tags along with my photo business cards. Honestly, this was the first time I've ever made pine syrup, and it was a total experiment. I had no idea if it would actually, as I hoped, be a great mixer for cocktails. (Think of pine syrup and gin and soda! Pine syrup and cranberry-infused vodka!) It was too early in the day to test.

But everyone was so eager to exchange whatever I wanted for my simple little syrup because it looked fantastic. I went home with lots of caramels and a delicious pear blossom drinking vinegar. I found it really hard to unload the super-crumbly rosemary tangerine shortbread, though I was positive it was delicious, because it just looked lumpy and messy. I fear that the packaging on my syrup set their expectations too high; my swap partners may just have been disappointed. I'll never know.

Make this work for you and your money
The key takeaway is that you need to make sure the experience — the gift, the restaurant meal, the shortbread — is roughly equivalent to the presentation. Or, if you're just not sure, have the experience equal the presentation; don't wrap the gift, serve your guests a meal without a fancy first course or menu cards or beautiful table settings.

You also can use this as a receiver and a consumer in to save money and relationships. The following are some examples to illustrate what I mean:

  • Think about your expectations as you receive a gift, year-end bonus, job offer, or negotiation opening. Have you decided the gift is surely a four-carat diamond ring because of its package and the glow in your boyfriend's eye? Dial down that expectation before opening it so you won't look crushed when you open the lovely opal pendant. (Maybe you'll be surprised!) Are you sure your year-end bonus will be six figures because your boss gave you such glowing praise in your review? Think about all the other factors that could affect your bonus — company performance, the economy, office politics, your boss's tendency to gush — before you go into the review meeting and find a nice-but-very-small check. If you're aware of your expectations, it will be easier to manage your reaction when they're met, or not met at all. (And please, don't spend that bonus until the check is in your hand!)
  • Going into holidays and other classic gift-receiving occasions with modest expectations can save you from that desire to treat yourself afterward. I see the advertising starting Christmas Day at about noon (or earlier if you've opened the Christmas paper with breakfast): “Get what was missing under the tree!” I've felt the desire myself to go out and spend when my parents/boyfriend/husband failed to get me the moon. In the past few years, with my husband overseas for Christmas, I've known what I was getting as soon as I got his big box of gifts to wrap for me and the boys (international customs is terrible for surprises). Instead of ruining the moment, it allowed me to pretend delight when I opened the gifts along with the boys — and in knowing what I was opening, I actually felt delight. And I had no desire to shop on “Boxing Day,” nor the day afterward.
  • Associate with people who expect the same things you do. If the expectation amongst your group of friends is that everyone goes out to a four-star restaurant on New Year's Eve, followed by tickets to a concert and visit to a bar where you'll toast one another, buying rounds of pricey Scotch, well, . If your friends expect that you all will send your kids to private school, you'll feel that you're a failure if you can't (or don't want to) spend your money that way.

I've come to hang out with friends who expect to go shopping at thrift stores together and meet for coffee at my dining room table (way cheaper than the coffee shop!). I'm thinking about inviting some families over for a fondue party for New Year's. We'll toast with apple cider. Cheers!

April's note: Like Sarah, I have an appreciation for a beautifully wrapped gift. (If you could see my mother's Christmas tree and gift wrapping skills, you would understand.) But I've seen some creative ideas for newspaper-as-gift-wrap, such as these presents with monogram tags and baker's twine — an idea you could use year-round for birthdays and other gift-giving occasions.
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Nicole
Nicole
8 years ago

Go me! Naturally good at lowering expectations! Also: proudly lowers the bar for other parents at school. Keeping up with the Nicoles means you don’t have to lovingly hand-craft birthday invitations etc. I like to think of it as a positive externality we provide making everybody better off. “At least we’re not as lazy as Nicole’s kid’s parents.” We do it for the good of the group.

Miser+Mom
Miser+Mom
8 years ago
Reply to  Nicole

Thank you, Nicole!! I’ll do my best to live down to your example.

A few years ago, I wrapped all my presents in creative trash. The oatmeal container that looked like a person’s head sat on my mom’s shelf much longer than whatever present was inside of it. Lesson learned; trash wrapping only this year!

barnetto
barnetto
8 years ago

My dad gets the Financial Times. That newspaper is a light salmon color, and as a kid I used to wrap everything in it. I wasn’t the best wrapper, so sometimes I turned my mistakes into things. One of the presents I turned into a squid one year, drew eyes on it. Another oddly shaped one became a rose.

I prefer wrapping in newspaper since my slap dash wrapping skills don’t measure up to having real wrapping paper.

Jen
Jen
8 years ago

Hey, us too! We figure that the kids in particular need something to look forward to as grown-ups, so we keep expectations low, low, low so that almost anything will seem exciting to them!

P.S. “The principal at work here” should be
“The principle at work here” (unless of course you really have/are a principal working to wrap your presents?)

My University Money
My University Money
8 years ago

Anything that takes away a little from the consumerism of Christmas is good in my books. My proposal for the rest of the world is to do away with the gifts entirely, and taking an extra day off with the money we would have spend on the gifts, then spending that day with friends and family. Far more rewarding, and much better economic utility at play.

Beth
Beth
8 years ago

“Associate with people who expect the same things you do.”

This point has saved my budget many times! It’s much easier to live modestly and save more when the majority of your friends and family are doing the same.

Unfortunately, a clash of expectations seems inevitable at Christmas. You know what they say about not being able to choose your relatives… I have much more fun giving people unexpected gifts throughout the year than trying to live up to people’s expectations once a year.

Pamela
Pamela
8 years ago

What a great idea for a post!

I experienced this myself recently.

Our executive director announced in November that not only would no one in our organization get a bonus (despite record-setting performance) but, for the first time in 20 years, we would not get a cost of living increase either.

At our Christmas gathering, we found out that the board decided to give us our COLA and a small bonus anyway.

It was amazing how appreciative everyone was of that small bonus check after having our expectations set so low. 🙂

Andrew
Andrew
8 years ago
Reply to  Pamela

In an office setting this strikes me as going over the line into blatant, selfish and almost cruel manipulation. Dishonesty from management is not a sound strategy for keeping a quality work force.

Carla
Carla
8 years ago
Reply to  Andrew

…especially if someone is struggling financially and relying on that bonus. I think what management did was childish.

Ash
Ash
8 years ago
Reply to  Carla

…and especially mean and manipulative after a record performance.

Dogs or Dollars
Dogs or Dollars
8 years ago

Just when I get all caught up in the pinterest beauty-full pictures of wrappings I will never be able to duplicate… Thank you! I am actually still working through a supply of actual wrapping paper that we’ve had for at least 4 years. I’m not sure who needs to buy this stuff, but it aint us. We’ve also been known to use brown paper bags, cut up, comics (of course), and we have a seemingly inexhaustible supply of gift bags. Beyond wrapping paper, I am often the victim of pie in the sky expectations for what turns out to be… Read more »

Pamela
Pamela
8 years ago

I’m so terrible at wrapping gifts that I could give someone a bag of kitty litter* and it would come off as a diamond, lol.

*I have never given anyone kitty litter. Not even as a joke, double-pinky swear.

Feral Homemaking
Feral Homemaking
8 years ago

Oops, I’m the Pamela in the comment above, not the one who posted before. I’ll sign on this way to avoid confusion in the future!

Margaret M.
Margaret M.
8 years ago

Growing up, my parents and grandparents often wrapped gifts with “the funnies” aka the cartoon section. There was nothing sad or parsimonious about it. To me, that’s a totally festive way to wrap a present.

Also, my grandmother unwrapped presents very carefully and saved the paper.

PB
PB
8 years ago

I tend to wrap as I go and put the ribbons on right before the packages go under the tree. This year, I missed about half of the packages, due to moving them around a lot. Guess what — nobody cared, and my 3-year-old granddaughter didn’t have to struggle with getting the packages open.

Cat
Cat
8 years ago

I’m reading a book right now that discusses expectation bias, and the findings are quite the opposite: when you give someone the expectation of pleasure, they’re much more likely to be pleased. If you give someone the expectation of displeasure, they’re much more likely to be displeased. In one experiment, participants rated the flavor of coffee higher as the presentation of it grew fancier (and worse when the presentation was bad). In another, participants in a blind taste test preferred a beer that had vinegar added to it; when told about the vinegar, they preferred the non-vinegar beer. Those are… Read more »

Nicole
Nicole
8 years ago
Reply to  Cat

It actually goes both ways depending on the circumstances. There’s “anticipation bias” which is what you’re talking about– this is where the anticipation makes you happier and think more highly of things. Then there’s what Sarah Gilbert is talking about, which is when something exceeds expectations and that makes you way happier. I’m not really sure what causes one or the other. Possibly how well you’re able to actually evaluate the outcome. Most people are terrible at telling the differences between wine, for example, so they’ll be heavily influenced by the cost or the fanciness of the label when asked… Read more »

chacha1
chacha1
8 years ago
Reply to  Nicole

Yep. This is why a giver should never, *never* use Tiffany-blue wrapping paper or boxes unless what s/he is giving actually comes from Tiffany. 🙂

barnetto
barnetto
8 years ago
Reply to  Cat

There doesn’t have to be any contradiction to the source cited in the article and what you are reading. If both phenomena have been seen in multiple experiments, then they’re likely real and a cause/difference can be found. You’re citing items that are being compared to each other. The items are inseparable from how they are presented to you. The other cites a single item being compared to what is in your own imagination (a real item and a virtual item). The item in your imagination is what exists in the packaging, the item unwrapped is what exists in reality… Read more »

Cat
Cat
8 years ago
Reply to  barnetto

In the coffee example there was no comparison of one item to another. People drank the coffee and were asked if they liked it. Overall, participants rated the coffee much higher when the presentation was nicer. (The beer example was indeed different–which tastes better?) As far I can tell, the coffee and the gift studies are very similar so it’s interesting that they had such different results. I’m assuming that something specific to gifts and the psychological experience of receiving them is what flips the outcome. Human beings are idiot jerks? When we’re not expecting anything (i.e., just grabbing a… Read more »

Rozann
Rozann
8 years ago

One year when our first two children were very young we visited friends on Christmas Eve, intending to stay only for dinner and then come home early to wrap presents. We had so much fun we stayed until almost midnight. So there I was with a whole bunch of presents to wrap and no energy to do so. I grabbed a stack of brown paper grocery bags and used them, stapling them shut. In the morning the two children thought they were the best presents ever and had fun all day putting in and taking out what they had been… Read more »

Frances
Frances
8 years ago
Reply to  Rozann

I often use brown paper lunch bags for small gifts — I fold over the top & staple it shut with a gift tag cut out of green or red construction paper (use a cookie cutter, it goes fast). They look great. Simple and maybe a bit granola-ish, but since I’m usually giving away homemade organic jam, that’s fine with me.

Well Heeled Blog
Well Heeled Blog
8 years ago

Imagine setting high expectations and then STILL exceeding them. 🙂 I love beautiful things because, well, they are beautiful. Doesn’t mean that I *expect* them or think I *deserve* them as matter of fact, but I do enjoy a nicely-wrapped or imaginatively-clad gift because it’s just another aspect of the gift-giving process.

babysteps
babysteps
8 years ago

My favorite wrapping story – one year we mailed my uncle his present, some socks (we got him socks most Christmases, he loved it – frugal family roots, eh?). We used an empty face tissue box to pack the socks, and even had the cardboard piece that you tear off (from the replacement box) to complete the box. We then wrapped the box. In February, when we saw him in person, he thanked us for the tissues! We told him maybe he would want to open that box 🙂 Glad he didn’t wait until that was the last tissue box… Read more »

Maureen
Maureen
8 years ago

I love to give and receive prettily wrapped presents. The materials used need not be pricey. We once did all out Christmas wrapping using flocked wallpaper scraps. The gifts looked gorgeous! I think taking the effort to make a package look special is appreciated by the recipient. It adds a bit to the mystery and anticipation too. Here are some ideas for you: You can sometimes buy wrapping paper or gift bags at thrift store or yard sales very cheaply. We often pass wrappings back and forth among family members from one occasion to the next. You can recycle cards… Read more »

Andrea
Andrea
8 years ago
Reply to  Maureen

Thanks for the suggestion on making tags from cards. We have a Christmas project that will get started the second week of January. My plan this year is that each person will wrap each gift as it is made and put a tag on it- but I provide the wrap and tags.

Nicole
Nicole
8 years ago
Reply to  Andrea

We make little tag cards from odds and ends of wrapping paper. Cut a rectangle, fold it in half, put in the to/from, tape to the package in the corner and put the bow above it.

Kate
Kate
8 years ago

I have a contrarian view. When I was growing up, we were poor. My mother, who was frugal WAAAY before it was trendy, would wrap gifts in newspaper or wrapping paper that was carefully saved and reused. I have Christmas memories of being told to unwrap my gifts carefully and save the paper for later….it sucked a fair amount of joy out of the occasion. Now that I am older, I use nice (not extravagant) paper, enjoy wrapping the gifts, love giving them and most of all, feeling ‘rich’ enough to throw the paper away! It usually ends up in… Read more »

Christa
Christa
8 years ago

My mom liked to wrap birthday presents in the comics from the newspaper, and every kid loved reading them! I might have to continue that tradition.

Denise
Denise
8 years ago

I just got a gift that had to be opened in an appliance sized box.

Inside of that box was a smaller box, then an even smaller one. The gift coupons from my daughter: car cleaning, a massage, etc..

So cute and innovative.

Denise

Amber
Amber
8 years ago
Reply to  Denise

Denise I love to do this too. This year it was an audiobook hidden in a sweater box. My sister was totally fooled and suprised. Changing the shape definitely changes the expectations!

shannon
shannon
8 years ago

I love newspaper-as-wrapping paper! I travel a lot internationally for work, so I try to grab any bizarre-looking newspapers (they’re nearly always free on the plane) and save them for gift wrap. I’ve also been known to rubber-stamp or paint on newsprint when I want a more colorful wrapper! One thing I’ve learned, though, is to thoroughly know your audience. Recycled newspaper wrapping is fine for most of my American friends and family, but I would never dream of giving a Japanese friend something wrapped so plainly, as culturally, the presentation of a gift is on par with the gift… Read more »

Songbird
Songbird
8 years ago
Reply to  shannon

Agreed! I’m Japanese 😉

Ru
Ru
8 years ago

The only things I’ve ever expected from friends and family are respect, love and support, which I guess are the most important things (d’aaawwwwwww!)

This year for my I got pearls and a very expensive handbag, which while I never would have expected, I certainly won’t say no to!

Sassy
Sassy
8 years ago

I always thought my expectations of Christmas were normal. Fast forward to my first Christmas this year with a new boyfriend. We talked about setting a limit for Christmas presents and he declined as he said he didn’t want to limit anything, asked me for suggestions of what I wanted… I gave him a list of all different things I am interested in, some cheap, some not so cheap. I did the same for him and bought him lots of things he’s interested in, some cheap, some not so cheap. We saw each other the day before Christmas and I… Read more »

Beth
Beth
8 years ago
Reply to  Sassy

I wouldn’t think you’re shallow — if he wanted to do small, inexpensive gifts then it would have been nice to know that at the beginning and it sounds like you would have been okay with that. Maybe he’s having money trouble and doesn’t want to discuss it?

Nicole
Nicole
8 years ago
Reply to  Sassy

You have my permission to dump him (if that is what you are asking for). If you don’t want to dump him, then I suggest you talk this out with him so it doesn’t build and so expectations are clear in the future.

Ru
Ru
8 years ago
Reply to  Sassy

Thoughts? Bog standard decorations are not presents! They are for the house, not for a person. If they were special (handmade by him, handblown glass, Austrian crystal) that would be a little different, but $2 decorations are not a present.

He sucks and you need to have a serious chat with him about what is and is not an appropriate present to give someone you are in a romantic relationship with.

Carla
Carla
8 years ago
Reply to  Sassy

I agree with Beth, he probably has serious money problems. I also think he is just clueless how to give a gift to a woman. I think he should have asked a female friend or sister if he has one for ideas and suggestions of gifts that cost less than X dollars. There are classier gifts he could have given you that cost as much as he spent on the decorations(?) from the dollar store.

Beth
Beth
8 years ago
Reply to  Sassy

Sounds like there’s a problem in the relationship. He doesn’t seem to value you enough to out some time and thought into a gift. Even if he is having a difficult time financially, cheap and broken decorations are a poo excuse for a gift. He could have cooked you a meal, crafted a thoughtful coupon books with things like “good for one massage”, “good for one housecleaning”, etc. even being in dire straits doesn’t mean you can’t provide a thoughtful gift. Some of the best gifts I’ve ever received were ones that did not cost much but I could tell… Read more »

Beth
Beth
8 years ago
Reply to  Beth

(Original Beth here — apparently there are two of us) I’m the only girl in my immediate family so I know how clueless men can be when it comes to gifts 😉 I always seem to end up helping people shop for other people — and I’ve found that making suggestions for myself means I don’t end up with things I won’t use. However, I’m at a loss to explain this one as a list was provided. Maybe he’s trying to send the message that he’s not too serious about this relationship yet? I would talk to him and find… Read more »

Rosa
Rosa
8 years ago
Reply to  Beth

I have to admit, old and jaded as I am, my first thought was “he totally planned to buy something awesome and then drank/smoked/frittered away the money.” It’s bad reasoning to give a shitty gift instead of a good explanation, but it’s typical addict panic reasoning.

Rosa
Rosa
8 years ago
Reply to  Sassy

Something like this happens to me every Christmas (they ask for a list, my list doesn’t suit them, so they buy me at least half crap they think is “gifty” and openly deride my wants – this year the family members we got in the name draw said “well it’s not like we could get you [that thing you asked for]! Not for CHRISTMAS!”) It’s not the dollar amount, it’s the getting your hopes up (asking for a list) and then dashing them. Ask him what the hell happened. Maybe he had bigger plans and they fell through, maybe you… Read more »

Amber
Amber
8 years ago
Reply to  Sassy

Sorry that happened Sassy. What we don’t know is how did he react when he got your gifts? Was he embarrassed about what he got for you, or did he treat it like no big deal?
So many things could be going on here. Could be he is stereotypical clueless, could be he is not that seriously into you, could be money trouble, could be he IS into you but is Testing you to see if you are materialistic about Christmas…

If you don’t want this to be an issue at Valentine’s, you gotta talk it out now.

Bella
Bella
8 years ago
Reply to  Sassy

I’ll never forget the year my brother in law’s girlfriend said she wanted to save money and ‘make each other gifts’ to be frugal and eco consious. He was so clueless as to how to make her anything he spent a whole load of money on a candle kit – and made a crappy candle. It was the strangest combination of sad and hilarious at once.

whoisbiggles
whoisbiggles
8 years ago

Our school year in Australia ends in early December, the younger kids bring home reams of painting, drawings and other masterpieces most of which we reuse as Christmas wrapping paper.

Michele
Michele
8 years ago

I love the creativity of eco-friendly wrappings…’brown paper packages tied up with string’…makes the mystery of the gift even better! Of course, attention to detail and interesting folding helps…

Ann I. Ball
Ann I. Ball
8 years ago

To wrap presents this year, I used the ancient Japanese tradition of Furoshiki, which is wrapping stuff in cloth, any cloth. BENEFITS 1.It really helps with odd-shaped packages. 2. It doesn’t tear at the corners like paper does. 3. You don’t have to be exactly neat as you do with paper (unless you want to be). 4. You also leave the recipient with the gift of fabric that he or she can reuse. 5. It looks very pretty and unique. There are plenty of Youtube videos on how to wrap common items in cloth, e.g. bottles for housewarming gifts, boxes,… Read more »

Sara
Sara
8 years ago
Reply to  Ann I. Ball

I re-use gift bags like many other people here, but I wanted to comment on this – I have several cloth draw string bags that I LOVE re-using every year. I’m hoping at some point when the paper bags get too worn I’ll be able to use cloth bags entirely.

marie
marie
8 years ago

A LOT of our gifts come in gift bags actually that are re-used from year to year. My mother has a huge bin where she keeps all the Christmas gift bags as well as the year-around birthday ones. We even keep the tissue paper unless it’s ripped or looks really bad. Some were wrapped in newspaper and some in Christmas paper. However, when you can buy a roll for $1 on boxing day for the next year, even that is pretty cheap imo.

Amber
Amber
8 years ago

I buy a lot of Stuff online. Most of it is delivered in a box way too large that is half-stuffed with lovely brown kraft paper. I neatly save the paper during the year and can use it for Christmas wrapping with some nice twine or ribbons, or get fancy and break out my christmas stamps.

Laura
Laura
8 years ago

Every year on Christmas Night, our family attends a hilarious Yankee Yule Swap party where the theme is to bring your worst gift (and there are some doozies, especially from us!). People learn quickly that the most beautifully wrapped gifts often contain the worst stuff. Nothing like tearing open a box wrapped in sparkling paper with an expensive ribbon, only to find a badly-made, failed-craft, cloth horse head.

Alan
Alan
8 years ago

This is some great advice! Also, investing while you are young is really the best way to build wealth for later years, I am 17 (almost 18) years old and already have a few thousand of savings in a stock portfolio which I manage 🙂

Krishanu
Krishanu
8 years ago

Wrapping presents in expensive, non-recyclable paper is one of the worst socially-acceptable scourge on civilized society. Not to mention how boys, and adults, “rip them open” on Christmas morning, without a thought to how the time and effort was spent in wrapping them up.

Sassy
Sassy
8 years ago

Hi everyone, Just an update on what finally came out of the disappointing Christmas with my boyfriend. We had a very intense talk about expectations and he explained that Christmas was never a priority in his house, this year his Mum gave him a pair of socks… So going forward we are going to do this another way. I am going to pick out what I want and he is going to pay for it. Much less romantic and spontaneous but I will get what I want and he will be able to know that he has given me what… Read more »

Maxell Keith
Maxell Keith
8 years ago

Learning how to manage money is one of the biggest challenges young people face when they first live independently. It seems like there’s never enough money to go around. One of the first steps in managing your money is setting a monthly budget. Here are some tips for getting started.

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