4 Ways to Spend Money

Milton Friedman the Nobel winning economist in his book "Free to Choose" provides an interesting explanation on the 4 different ways that people spend money.
1. The first way is when you spend money on yourself. When you are doing this whether it is buying lunch or buying a gift etc, you want the best possible value for your money. You shop around until you are completed satisfied with what you are getting for your money
2. The second way is when you spend money on someone else. When you are doing this, even though it is your money, you do not care whether the other person is getting the best value out of it. For e.g. when you buy somebody lunch or dinner you do not care whether the food is good or bad.
3. The third way is when you spend somebody elses money. An example of this would be when you are on a business trip, you will want to get the most value out of the money that you are spending even though it is not your money.
4. The forth way is when you spend somebody else money on somebody else. A prime example of this scenario would be the government spending the taxpayers money. Though the governments are supposed to use the taxpayers money wisely and for the benefit of the people, the opposite always is true. Since the money does not come from one's own pocket, there is no sense of ownership and accountability. This would also explain the bad state of affairs in the public education system in the US as well as in India.
You can also see Milton Friedman explain this in the video 4 ways to spend money