What Is Your Price?

If you read many financial articles or blog posts, you will see people suggest that before you buy something, decide if it is something you want or need.  The idea is to learn to discern the money that you have to spend on needs versus the money that you shouldn’t spend on wants.

Recently, we were on vacation, and I had to do some work on the computer.  At home, I use a wireless keyboard and mouse because when I use my laptop keyboard I inevitably push some button that does something weird like make all of my words red with a line through them, and then I can’t figure out how to fix it.  Since I had a fair amount of work to do and my mouse batteries were dead, I asked my husband to stop by the store when he attended his conference and buy me some AA batteries.  I needed them to do my work.

He returned home mumbling about how expensive the CVS by our hotel was.  I was shocked when he told me that a pack of 8 batteries cost, wait for it, $19!!!  I needed the batteries, but I could not reconcile spending $19.  I toughed it out and didn’t use my wireless keyboard and mouse.  Suddenly I didn’t need them quite as much.

Since then, I realized that doubling the expense of the item in my head would make a good litmus test.  For instance, I am out with my son running errands and I need something to drink.  I would often spring for a $1.59 water (stupid, I know), but if I doubled that amount in my head to $3.18, would I still buy it?  No?  Then I shouldn’t buy it at $1.59.

Many people are financially conservative when it comes to large expenditures and think long and hard before making a purchase.  However, many other people (myself included), carelessly spend their money for little purchases such as the $3 bag of chips your child asks for when you are shopping or the $1.59 water at the store without giving it much thought.  The problem is that we make those little purchases that we rationalize we need on a daily basis, or even several times a day.  That adds up quickly over the course of a month.  Many people give in to a small expenditure because it is only $1.59, or some other small amount of money.  However, if you double that amount in your head and find you wouldn’t want to part with your money, then maybe you shouldn’t buy it in the first place.

Comments

  1. The area where I constantly see this is the vending machine. There are people who will go buy the same bottle of soda every day for $1.50. Ask why they don’t just buy some at the store and bring it, and it’s ‘Oh, that’s too much trouble to remember buying it and bringing it’.

    Not really when you figure that bottle of soda every day can add up to nearly $400 per year. Yikes!

    • That is so true! Or, people will say they don’t want to buy a case of pop at the store because they don’t want to drink that much, but they drink one every day out of the vending machine at a ridiculous mark up.

  2. If I can not find enough of a discount for a product, I won’t buy it. I generally do my research online using various shopping bots.

  3. Bottled water is the worst and I’m guilty of it too. The mark up is terribly high for something that we all have at home. FYI the distributors sell it for $3-$4 a case. That’s 13-17 cents per bottle. Outrageous.

  4. I always keep bottled water (bought at the store at a discount) in the car in a dark box. This is for emergencies, such as getting stranded or an accident or blizzard. I normally take our stainless water bottles with us full of water everytime we go somewhere, no matter how short the trip. This has saved us a lot of money over the years. If we forget the stainless bottles, and someone is thirsty, we will open an “emergency” bottle and replace it once we get home. It also helps to keep a granola bar on hand for emergencies. This can tide the family over so fast food isn’t considered : )

  5. That’s where tracking expenses has helped me in the past. I never knew how things could really add up until I did that.

    About 10 years ago, I’d go to the company cafeteria each afternoon to buy a soda. I’d go with a colleague of mine. One day, I thought about it – $1.00 a day, times 250 working days a year… Wow! It occurred to me that I was spending a good sum of money through these incremental expenses. I commented to my friend that that $250 could be a round trip ticket to Vegas instead! I could see the light bulb go on, in his expression.

  6. I’m glad that this works for you, but it doesn’t make much sense to me. There is basically nothing on earth that I would buy for double the price, even if it was a great deal. LOL

    It does, however, pay to think about how much you’re spending when you buy something over and over (x5 days a week etc) and I find myself doing that!

    However, whatever works is good :o)

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