How To Spend Money
Economists believe there is an omnipresent hand that regulates the market place. They’ve probably made some sort of graph to support this—economists freakin’ love graphs. There are people who want to buy things and other people who want to sell things and it more or less averages out.
What this means for you is that the value of any commodity is determined by everybody. Sounds fair. You’re not everybody though. You’re reading personal development articles on the internet. You’re an outlier and knowing this can be highly beneficial for knowing where to invest your money for maximum returns on your health, profession, and relationships. For all you economists out there here’s what’s up:
When I’m indecisive about spending money I ask myself “what value would I place on this item?” The answer usually lets me know if I should part with the green. I’m a vegan who loves to cook (ladies) and does a fair bit of exercise, so health and good nutrition are things I value highly. When I’m doing my weekly food shop I’m not looking at the prices. I’m getting what I need to eat well, and to enjoy cooking and eating the meals I make. I don’t care what the numbers on the receipt are. Those numbers were put there by everybody else. That’s the value they placed on them. And they’re all a bunch of fatties who don’t care what they put in their bodies.
Predictably I end up spending more than most people in my situation, but if I was to pay a figure that I felt accurately represented the value I was getting it’d be magnitudes higher. In my mind I’m getting a really sweet deal.
I use this type of reasoning a lot. If there’s some drumming gear that needs upgrading I’ll find the hardware I want then ask for the price. If an opportunity to try something new comes up I’ll say yes and just cop the damage. These are areas where my internal value of things far exceeds the external value society has placed on them.
Back in high school I went to the local fair with a few friends. Everyone was complaining how overpriced everything was and that all the rides were a rip off. I even joined in and was very vocal about not wanting to go. Looking back now though I can remember thinking that I was actually OK with $20 roller coaster rides and $50 junk filled show bags. The half broken flickering lights, the screams from the big drop, and the sugary smells in the cool night breeze all had a very escapist movie like quality to them. I was paying for an experience and the value I place on that is basically limitless.
A story where I get fleeced
Having this attitude can lead to certain pitfalls though. One of the people who came to the fair was a girl I’d just started seeing. I decided I’d do the “guy thing” and win the biggest fuck-off huge stuffed animal I could find and surprise her with it. I managed to sneak away from the group and found an alley lined with all sorts of carnival games. Throwing balls at bottles, shooting bullets at ducks—that sort of thing. Now if you’ve read any of our quick skills articles you’ll know I have a bit of a penchant for geeky skill type activities. To say I was over-confident would be an under-statement. I eventually found what I was after: a game where you stood a few feet from a hoop that you throw balls through. Too easy, I thought…
The guy running the show saw me staring and had me figured in an instant. A young-ish looking guy wandering all alone, eyeing off giant stuffed teddy bears—yep, his donkey-jawed carny daughter was finally getting that dental surgery she needed.
I’m not exactly sure what happened next. I remember at some point I’d sunk about 8 baskets and was thinking “Kobe doesn’t look this good.” But I still didn’t have the prize. I thought I understood how the game worked. Pay money, shoot hoops, win prize. Turns out it was closer to pay money, shoot hoops, hypnotize chump with carny wise-talking and make him believe he has misunderstood the rules, pay more money, shoot more hoops, and repeat until he has no money left and give him the teddy out of pity.
I got fleeced. I’m not going to say how much. It made the roller coaster rides and show bags look like pocket change though. I guess in an odd way being able to experience all that did make it worthwhile. Seeing a carny conman in action and getting a funny story negates the monetary expense for me. I must be the ideal mark!
Finding your value system
Calibrating your own values doesn’t mean you will end up spending more money. Unlike some writers on this blog I’m not financially well off. It’s a two way street: often the value I place on things is lower than how society values them. 20% off that extra pair of jeans I don’t really need is still way too much. Sure, I’d be up for a new pair of duds, but the actual value I’d be getting is very small. And just because you place a high value on something doesn’t automatically mean you have to spend more money. It allows you to honestly evaluate what’s important to you without worrying about what something costs. When I buy new drumming gear I’m after a sound or a feel. That doesn’t always mean I have to buy the best. It means I’ll happily pay $20 or $2000 because the value for me is the same in either scenario.
A fun way to look at this is to imagine you’ve got your own personal marketing team. When you start viewing things with your own price tag the sales become ridiculous! Everything that’s really important to you is permanently on sale, and all those 2 for 1 deals are giant warning signs that read “Valueless crap for sale.” It’s like backwards day everyday!
By aligning your spending habits with the value you place on things you end up using your money in ways that are of most benefit to you. When I invest money in food, high end drumming gear, or a cheesy local fair I’m getting maximum returns on my health, my profession, and my relationships. Buying healthy food makes me feel good about myself and helps keep me in shape; buying new drumming gear increases my motivation to play which results in better playing more musical opportunities; and spending the night at the local fair gave me an experience with friends and loved ones.
Break away from the price tags other people place on things. Spend your money in areas that are of most value to you and you’ll get the most value in return.