DISQUS

FinanceAndFat · 2 years ago

Interesting take on spending. I like it.

Mrs. Micah · 2 years ago

Thanks, Frank. :)

Consume · 2 years ago

The only catch is...

I have seen friends of mine purchase a boat. The bought the boat when the could not afford the time. After a couple of weeks unused they guilted themselves into using the boat. This guilt of getting value from something made them use the boat twice a month for the next 2 years. The still never had the time but the forced themselves to get value on their purchase and the became slaves to their boat. I understand we don't want to throw it into the drawer and not use it, but we don't want to force ourselves to create value in something when it doesn't fit. The bottom line is buy what you need/want, don't want what you do not need.

Mrs. Micah · 2 years ago

That is a good point, Consume, we can't force value. Your friends could have redeemed that purchase by selling it off and recouping some of their losses. Investments are flexible that way. Of course, this would involve admitting that they made a mistake, which people don't like doing with big purchases.

Jessica · 2 years ago

You make some good points on this subject, but I respectfully disagree with calling consumables investments. I prefer to think of investments in the classic sense, and what you've describe as making smart purchases.

I've often seen people use the term "investment" to justify a luxury purchase, to make themselves feel better about spending money on something that they may have not needed or more money on something they did.

It could be something like a designer purse, or a big house with even bigger mortgage payments. I'm speculating here, but that mentality is probably what drove at least some of the people who are now facing foreclosure to take on more house than they should.

For the already frugal this mindset would probably work, but I think if you're climbing out of debt this could just become a way to rationalize spending more than you can afford.

Mrs. Micah · 2 years ago

Good point, Jessica. This doesn't work if you're not of a frugal mindset overall. Even if you get a good return on something you can't afford--you still can't afford it.

I hope that this way of thinking would at least help people learn from their spending mistakes and understand their spending patterns. But like other ideas, it can be misused.

Peter · 2 years ago

I agree that calling this investments may lead to excuses for spending. I prefer lost opportunity. Every dollar you spend is a lost opportunity for that dollar to be out there working for you and making you richer, so is it really worth it to spend this dollar that way? This should hopefully lead to a thought about value received, other ways to meet the same need, etc.. However, for the "I want it now" set, it won't matter, they'll spend it today. On the other hand, we shouldn't beat ourselves up over every single purchase, if your within your budget or spending plan, either let it go or make a quick decision and rest easy, you're still on track.

vh · 2 years ago

This is a pleasant piece of insight. I'd never thought of "food" as a kind of investment, but on reflection, it surely is. And thinking of it that way helps incline you to buy healthier foods at the market and stay away from those empty calories.

My parents, who were decidedly in the working class, also thought of things like a good coat as "investments" and so would try to buy the best quality they could afford in products such as appliances, clothing, and furniture. Thank goodness! When we returned to the U.S. after 10 years overseas, my mother bought a very nice set of solid birch furniture, which she cared for well and left to me. Because of her wise investment in quality products, I had decent bedroom, living room, and dining room furniture to fill my apartment when I left my marriage. All that (now retro!) stuff is still in use, and occasionally admired by friends.

One drawback to thinking of consumables as investments, though, is that some marketers pitch their (unnecessary, extravagant, why-do-i-really-need-this) products as "investments," when more likely the word they're groping for is "indulgences."

Frugal pursuit · 2 years ago

I found your guest post quite thought provoking. You reasoned this out well and I wonder why I never thought of my purchases in this fashion before. In fact, I am still ruminating about it.

Marcy · 2 years ago

I think it's important to note the overwhelming influence on society to spend, spend, spend. This encourages people to make bad investments. We are told that we "need" iPods, HDTV, the newest gaming system, etc. Like your friend, Kate, who bought things and never used them. Instead of making irrational purchases, we must ask ourselves if the item is really needed.

Like the coat, which is a good investment. You could spend $50 on a "cheap" coat that wouldn't last as long. Or you could spend a little more and have an item that will last for years.

Atul · 2 years ago

Money is earned to be spent or to be invested so that it can be spent later. After your necessities are met, what else do you have it for except to donate, save for your kids, or buy things that you want?

I don't think of consumption as a financial investments. Rather, these transactions are emotional investments. They make you happy to some degree. If I spend a little more on a car that I enjoy driving, it gives me much more joy than driving a lame car and seeing the numbers in ink on my bank account statement be $100 a month higher.

I don't think we should spend spend spend to just consume and chase that never-ending target of wanting more and more, but we shouldn't feel guilty for spending and we should enjoy our money.

Any one of us could die tomorrow. When my dad passed away, my mom felt sad to have life insurance money that she couldn't enjoy spending with him. I wish he could have enjoyed using more of it before he died given that he knew his kids would be ok financially.

Atul