Do You Spend More If It’s Not Your Money?
I’m in Atlanta right now for a scientific conference so you are getting a work-travel-related question!
On this trip, my major expenses (conference registration, hotel) were paid for me and I have to pay my minor expenses (food) up front and then I’ll get reimbursed after I get back. When I attended a conference while working for the government, though, my major expenses were paid and then I received a generous (to my standards) per diem for food.
At a dinner on this trip, my companions made some comments about ordering slightly more expensive dishes than they normally would have because we weren’t spending our own money. I didn’t upgrade my choice, personally, although I certainly acknowledge the incentive.
The trip with per diems gives the opposite incentive – to order a less expensive meal than normal and pocket the excess cash.
I think in both those situations I still just ordered what I would have if I had been paying my own way, but my mind was still encumbered by the incentives. On this trip, I don’t want to over-order because something might still go wrong with the reimbursement or there might be some rules I overlooked – because the money isn’t yet in my bank account, I don’t want to count on it. On my previous trip, I didn’t want to cheat the per diem system by cheaping out on the meals and diverting the purpose of the money! The same principle applies whenever you can make choices when someone else is paying – gas reimbursement, shopping trips, gift cards, etc.
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When you’re not paying, do you order a more expensive dish? How does your thinking change with reimbursements vs. per diems when you travel for work?
photo from Free Digital Photos
Filed under: choices · Tags: per diem, reimbursement, work travel
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This never happens to me because my conference travel funding has a yearly dollar limit that usually just pays for travel and registration. I would spend more on lodging if I didn’t have to pay out of pocket – I’ve done cheap hotels miles away from the conference, relatives’ couches, and AirBnb, but would be neat to stay at the conference hotel! I doubt I would get anything different at a restaurant though, if I’m going out at all I’ll get what I want. My husband gets his full costs reimbursed and feels like he has to submit receipts in “good faith,” so he’ll order what he would normally get, try not to go out too much (last conference he bought a bunch of bananas for breakfasts), and not submit all of his food receipts because he’d have to eat at home anyway.
Gift cards, though…I think the point of gift cards is *not* to just spend them on groceries or gas or other non-negotiable needs if you don’t absolutely have to, so yeah, treat yo’self 🙂
I definitely wouldn’t stay at the preferred hotel if I were paying. Majorly overpriced. Actually some of the cheap hotel rooms/hostels we’ve stayed at recently have had better amenities and such. I feel kinda bad eating out 3 meals a day because breakfast can be so cheap, but there is no way I can prepare my own food in this hotel.
Yeah, we’ve actually noticed that a lot of the “Motel Cheap” type places tend to have free wireless and continental breakfasts, whereas the pricey conference hotels charge $10-15 a day for wireless and you have to go to their restaurant if you want breakfast. (Hence the buying bananas, or a loaf of bread and jars of pb & j and granola bars to prep in the room, both of which work in any hotel.)
Yep, ours was $10/day for wireless. That contributed to my not being on the blogosphere at all this week (well, mostly it was the business). It made communication with Kyle (no cell) difficult.
I’ve never had to deal with anything like that, but I would probably order down because I would feel guilty about somebody else paying for my food.
I have a friend who used to work as a troubleshooter for a large company and would be sent all over the country for weeks at a time. His food expenses were reimbursed but he felt so guilty about it that he just ate Subway all the time and still didn’t submit all of the receipts.
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That sounds awful! I would spend what I needed to if I had to travel. I would get sooo tired of it though because I like preparing my own food.
Me too. If I had to travel for work and was going to be somewhere for than a day or two, I would insist on a room with a kitchenette. For him, it was a first job out of college and the traveling was a new “perk” they added after a year. He eventually got sick of it and now works for a local utility so they will never have to send him so far from home as to not be able to come home at night.
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I’m given a company credit card and I can spend what I need to — the only time I spend more than usual is if I’m taking someone out to dinner. I told my bosses that I feel really guilty sometimes debating between a latte and a regular cup of coffee. They told me in no uncertain terms to knock that worrying off and focus on bringing in more sales.
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What kinds of things does a company credit card cover? Coffee seems weird to me to be a business expense if you’re alone!
I don’t spend much more than I normally would. On my last business trip, there was definitely a bunch of outings to coffee shops for breakfast (pastry + hot beverage) and fast food sandwich places for lunch/dinner. I still have my normal routines. But for an extended stay, I’m more likely to look for a place with a fridge if I’m by myself and buy juice, cereal, etc. to eat breakfast at home.
Per diems are pretty awesome, but my business trips are always set up such that I cover everything and then expense it once I get home. I hate doing that with the hotels though because it really drives up my credit card bill for the month! (My employer won’t give me the money for the hotel until they see the final bill in case there were any miscellaneous charges. I get that. I just don’t like floating $1000!)
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Kyle had a conference a couple years ago where he had to pay for the hotel, conference registration, and everything else up front, and then there were major delays in the reimbursement process when he got back. I think the total was between $1 and $1.5k. Eventually we were repaid but I’m so glad we had the cash on hand to cover it as the charges stretched over a few months so we couldn’t keep them floating on our credit card!
That’s crazy! I usually can get the airfare covered with a corporate card and then registration-type-upfront fees I can expense immediately. It’s just the food and the hotel that I have to float myself.
Business trips are actually the reason I started keeping a portion of my emergency fund at the bank/credit union I use for my checking account!
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If I’m with a group, I tend to follow the herd mentality and not stick out by ordering something far more or less expensive than everyone else. So in work situations that normally bumps my meal up a little bit.
I am really hesitant to spend less than given on per diems, because I am afraid of getting them reduced for everyone else! Whenever we traveled with the high-ups, I feel like they took note of our spending…
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Hm, good point about coming in under budget reducing the budget! Although I guess I didn’t have anyone observing my behavior when I had per diems so it wouldn’t matter.
MD gives us $42/day, whether or not we spend it. I usually pack up as much (healthy, organic) food as I can without worrying it will spoil, and then I order one nice dinner w colleagues, then pocket the extra cash… Which is usually a handsome amount! If they only reimbursed the amount of the meal, I’d frankly take advantage of the system (and then subsequently vote libertarian… 😉 ).
I like that system. I much prefer eating food I prepare myself to eating out. $42/day isn’t nearly as much as I got from the gov so I guess it was very generous…
Back when we made less money, it definitely made a difference. But now I order what I want even if I’m the one paying for it. 🙂
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It’s definitely harder to pass up perks when you are tight elsewhere. When I first started grad school, I felt like I had to eat ALL THE FREE FOOD offered to me.
I’d say it loosens up the reins a little bit. I wouldn’t go stir crazy and I wouldn’t automatically choose something more expensive. I might go for something frugal I would have bought anyway, or I might feel free to splash out for something I wouldn’t pay for ordinarily.
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Sounds like it wouldn’t affect you much, which is great. I make those same range of choices if I’m paying for myself or if I’m being treated.
[…] really could have ignored the price discrepancy – after all, I wasn’t even paying for the meal! And if I had known how ridiculous the cashier was going to be I probably wouldn’t have pursued […]
I have ended up gong both ways. There are times that I would spend less just because, times I would spend less to pocket a per diem difference and times that I might get a little extra knowing I would be reimbursed. I guess it depends on my mood at the time.
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Does your job provide both reimbursements and per diems or has that been from multiple employers?
I tend to order the same thing as if I were paying, although perhaps I’ll order a drink other than water. For company paid meals I may not be paying for it directly, but it can still affect me. After all the company’s financial health is somewhat tied to mine; having the attitude that “it’s not my money so who cares” is borderline irresponsible in my opinion, although I wouldn’t fault anybody for what they order.
When friends are paying I usually under order unless they were to specifically tell me to order whatever I want.
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Good point about taking advantage of a per diem or reimbursement system having negative effects for your company. In my case the organizations paying were enormous so it doesn’t feel like one person could have a big effect, but if everyone thinks that way… I guess it also depends how much money you’re spending on reimbursable stuff as a percentage of your paycheck, for instance, or the revenue you bring in – if it’s a big %, taking advantage makes a huge difference.
Haha so “what you want” shifts up if you’re given a free pass from your friend?
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