I call it funny money. Funny money is money we give away by forgetting what it is in real money. Chips in Las Vegas are funny money. The gambling house knows we wouldn’t bet as much if were a twenty or hundred dollar bill we are putting on the gaming table. We, however, forget when all we have to wager with are plastic chips.

Credit cards are funny money for the same reason. They hypnotize us into spending money we don’t have for things we don’t need. The same is true for interest on a loan. One percent more isn’t much, is it? Unless it is for a $500,000 loan for thirty years. Funny money transactions are everywhere. It leads us to agreements that later cause regret and aggravation.

Budget deliberations always involve funny money chips on the table. Beware of agreements based on percentages, burden rates or learning curves, shares of stock, price per share or options with low probabilities. Know what you are dealing with in real money, not chips. Before you say something as conciliatory as, “Let’s split the difference,” know what the difference really is and what you are about to give away.

Funny work is like funny money but is even harder to recognize. In the workplace you are often asked by someone to do or stop doing something. Or perhaps you are asked to give up one or two of the additional people you requested in your budget because funds are scarce. The trouble with dropping the request for new people is that it affects not only the schedules you have committed to but also your group’s workload distribution. Any time you are asked by an associate to cease doing something or to do something extra you are dealing in funny work.

Funny stuff is a bit different from funny money. It occurs frequently in information technology (IT) activities. Changing the parameters and scope gradually to an increased statement of work is possible but takes lots of computer programming to do so. The initial budget and schedule agreed upon may no longer be appropriate. That’s how funny stuff takes over IT projects that have inadequate change control systems and fail to follow project progress regularly and systematically.

Funny work, funny money and funny stuff find their way into many workplace negotiations. The only way to deal with them is to recognize their nature and think it through in terms of real money, real work and real stuff before you get to “Yes.”

Thanks for visiting! If you enjoyed this post, you can learn many more useful negotiation tips through our free download of Negotiating Tips.