The Frivolity of Frivolous Expenses

In the context of cash assistance to displaced persons, what constitutes a "frivolous expense" to donors doesn't necessarily reflect reality.

Are you following the question of how people receive cash assistance in emergencies or protracted crises? If so, hop aboard the listserv of CALP (Cash Action Learning Partnership). Brisk discussions, great resources, and important insights circulate weekly, often daily.

Lately, we have been discussing “frivolous expenses”—money spent on alcohol, cigarettes. Participants in the listserv are making excellent points. They assert that tracing cash uses in hopes of soothing donor concerns that money is not being spent wisely is folly for two reasons: 1) we already have substantial evidence that an increase in available cash to households does not increase marginal consumption of alcohol or cigarettes and 2) it’s hard to trace actual use since cash assistance typically supplements other sources of household income.

I would like to pose a third reason why a focus on the uses of cash assistance is folly. To do that, I need to take us into the language of financial planners. Rarely do financial planners, at least in the U.S., use the term “frivolous expense.” Instead, they prefer to divide people’s budgets into committed expenses and discretionary expenses. In this system, the same item can potentially be classified differently at different points in time. For example, a financial planner speaking to my students the other day agreed that purchasing a grande latte at the local Starbucks was a discretionary expense in the fall semester, and should be enjoyed only after committed expenses were budgeted for and met (including any set-asides for savings). But the coffee’s classification could change. Let’s look to the spring. In March, inviting a potential employer to an informational interview might include treating them to a beverage. For each networking week, the grande latte (in fact two) would now be budgeted as a committed expense: it represents an investment in a student’s future.

Perhaps in settings of displacement we should similarly analyze expenditure on cigarettes and alcohol. When are they committed expenses and when are they discretionary? In a qualitative study I led in 2016 and 2017 on the Financial Journey of Refugees, those receiving cash assistance said they did not use their aid on cigarettes and alcohol.*

Those not receiving cash assistance, and not yet habituated to the games of aid, were forthcoming about their cigarettes budgets. Cigarettes, they claimed, were a condition of their survival. To gather information on affordable apartments or the best routes out of the country, they needed to offer up a smoke to the person in the tent next door. They happily offered a cigarette to the man at the taxi stand to learn the best times to cross a border or where to get the best rates to convert hard currency into local money. When you are a refugee or migrant, information is survival. Investing in information is not a discretionary expense, it’s a committed expense. In Greece, one group of young Afghan men told us that they did not smoke in Afghanistan but budgeted for cigarettes prior to departure. Their informants told them they had to invest in being sociable along their travels across Iran and Turkey. In fact, they took up smoking as a strategy for socializing and planned to quit when they reached their countries of destination.

Both alcohol and cigarettes had benefits beyond their powers to elicit crucial information. They also facilitated bribes. A woman told us of the “special drink” she carried to persuade the guards at a checkpoint to usher her family through without checking their documents, which if examined, would be cause for their arrest or return. Cigarettes were often exchanged in detention centers and safe-houses for favors like an early release from detention or a better placement on the open-back truck. They were also cheaper than cash bribes. Without using the terms “committed expenses” versus “discretionary expenses,” our respondents set us straight on how exactly cigarettes and drinks constituted an investment in their safety, survival and resilience.

Thus we add a third nail in the coffin of donor insistence on tracing the uses of their cash assistance – the utter frivolity of tracking frivolous expenses. I am sure we will find many more nails to pound into the coffin as our discussion advances.

* Incidentally, respondents were confused about whether they should say they used cash assistance on condoms. Did condom expenditure prove that they were responsible adults earnestly trying to prevent disease, or did it prove that they were irresponsible adults interested only in the next conquest. And, no, we did not ask them if they spent their cash assistance on condoms. Our respondents surfaced the topic when we asked what questions asked by other researchers confused them, so that we would not make the same mistakes. They then asked us for tips on how to answer the condom question, which we gladly gave them.

Kim Wilson is a Lecturer in International Business and Human Security at the Fletcher School, Tufts University and is part of the faculty of Fletcher’s Henry J Leir Institute for Human Security.  

Have you read?

The Digital Demands of the Displaced: Don’t Track Me, Don’t Expose Me, Don’t Cut Me Off

Financial Inclusion and Immigration in Europe – Disrupting Identity Norms

Migration’s Middlemen and How to Pay Them

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