Value vs. Expense (part 2 – or: How to Avoid Impulse Buys)
Right so here’s the sequel. So I’ve established that sometimes certain things cost a certain amount without many options, and should you want said thing, you’re stuck (the example I used was plane tickets). I’ve also said previously that when you have options, it’s sometimes beneficial to go for a more expensive option. But don’t go rushing out to drop $1000 on something that you could get for $500 and be just as good. Here are my rules:
Value vs. Expense (part 1)
The value of something – its worth to you – versus its cost is a crucial part of our philosophy. We enjoy the good things in life, but make no mistake – great expense does not necessarily bestow a great product or experience. Certain things have a universal or absolute price – for example, you will never find a transatlantic plane ticket for less than, say, a DC to New York or London to Paris train, but if you want to fly across oceans, this is something you must face. Do you really want to go from New York to London? Then your options are limited and there’s not much you can do about it, so if you can afford it you will probably say “Screw it, it’s $1000 a ticket, but I really want to go. So be it, evil airline, here’s my money.”
On the other hand, many other things are greatly variable – You can buy a $20 pair of jeans or a $200 pair of jeans (possibly $2,000 but then you’re a total sucker and beyond our help). Is that $200 pair necessarily better than $20? No. It may be a bit more durable and stylish, but this is not to say a cheaper pair of jeans, or indeed anything, is by rule inferior. Can I afford $200 jeans? Yes. Would I ever buy them? No, because I’m not an idiot, and even though I can afford them, I would derive no greater utility than from a pair far less – I do not highly value expensive jeans. Does that mean you’re an idiot if you bought $200 jeans? While I’m inclined to say yes, you might not be. You might genuinely derive greater utility out of $200 jeans than I do. (Perhaps you hang out with billionaires who only wear haute couture and will mock you mercilessly if your socks aren’t made of gold thread and your jeans sewn by French maidens in a convent outside Paris. Perhaps that’s a justification for buying $200 jeans. Perhaps you need new friends, but that’s another subject…).
It comes down to knowing what you want, knowing the range of what things cost, and whether what you want is worth said cost. Let me give another example: I’m a car fanatic, and I love high-end, high performance cars. This does not mean, however, that I lust after the most expensive cars for the sake of them being expensive – a Porsche 911 S is cheaper, but arguably better performing than the 911 4S, and is considerably cheaper and more attractive than other options, such as the 911 Turbo. One of the main reasons I like the 911 so much is because of its beautiful styling. Of these three, the Turbo is the most expensive and in some people’s mind the most desirable, and indeed in terms of absolute performance it is superior. Compare the aesthetics however:
The Turbo has a rather nasty spoiler and large side air intakes that ruin the fluid, clean lines of the original car, thus ruining it, despite costing tens of thousands more. If someone were to give me money for the Turbo, and said “you must spend some of it on a Porsche,” I would firstly thank them profusely (WBH encourages politeness), then buy the 2S, because it has everything I want in a 911, and would pocket the remaining cash. Not only is the Turbo not worth the extra money (I mean really, it’s not as if you can drive it at top speed anywhere), but it’s also a question of taste, and the Turbo defiles the subtle beauty of the original.
Keep in mind these are my preferences, and while this example uses something out of reach of most people (the author included), I know what I want, I know the range of options, and I know that the highest option is not worth it. At this point it’s a question of: “Well, do I think it’s worth spending X amount on it?” This applies as equally to jeans as to cars, or indeed as to anything. Ultimately buying something is your decision, but always think in terms of what you want/need, whether X product satisfies those desires, and whether it’s worth the cost.
Stay tuned for part 2 on reasons why spending more (though not always the most) can be better.