Not worth the money

In Chapter 1 of All the Money in the World, I suggest that readers look through their bills and receipts — but not for the usual reasons (that is, to tally it up and make sure the money coming in is more than the money going out). Instead, I ask how these expenditures make you feel. What are you thrilled to spend money on? What just makes you annoyed? What seems like a good idea at the time but later turns out not to be?

If you keep asking these questions, over time, you can start to ascertain what has a high utility function for you. The reason to do this is that knowing what makes you happy can help you make better financial choices. We waste a lot of money doing things we think will make us happy, but don’t. Better to use that money on things that actually will get you closer to the life you want.

So what falls into my do-not-spend bucket? After thinking about this topic for the past year or so, I’ve got a few ideas.

First, there’s “clothes I got a deal on.” There’s something psychologically satisfying about getting a bargain, or at least thinking you have, but I read recently that much of J.C. Penny’s merchandise was sold at around 50% off. Clearly, for many stores, a “bargain” is no such thing — it’s part of the company’s strategy. For years, I’ve bought cheap shirts or shoes, and then seen them sit in my closet. It’s not a bargain if you don’t wear it. So I have pretty much stopped shopping for clothes. I borrowed maternity clothes for this last pregnancy. Despite my handbag sporting ink stains, I plan to keep using it until I find a new one I truly love (Zappos is helping this by having their little ads follow me around the web — showing the handbags I’ve clicked on. Curse you, targeted marketing!) I’ve kept repairing a pair of sandals I love rather than buying new ones.

I never buy lunch unless I’ve got a lunch date with a friend. Leftovers work fine. I don’t order pizza much anymore either. DiGiornos tastes as good to me as Dominos, and it’s cheaper.

I don’t buy soda. I’ve realized I don’t actually like it. Diet Coke gives me the hiccups.

I find fancy salons a wee bit creepy. So I’m quite happy with this place I found that charges $23. I can be a big tipper and it still doesn’t come close to what I was paying in New York.

On a much larger note, we realized we weren’t getting enough out of our NYC taxes to justify living there. So we moved, thus saving a bundle there.

But there are also things I’ve decided are worth spending more on. I love eating out in intriguing restaurants — one reason we ate at Sbraga in Philly for an early Valentine’s day dinner (it also helps that a friend is a part owner; I like supporting my friends’ businesses!) I love art, so that date included a stop at the Philadelphia Art Museum to see the Van Gogh exhibit. Our art museum membership definitely has a higher utility function for us than spending the equivalent amount on Valentine’s day presents for each other. I’m going into NYC soon for a concert that features a world premiere of a Mohammed Fairouz work performed by the Young New Yorkers’ Chorus. I know that hearing live choral music, particularly that no one has heard before, makes me happy. It definitely makes me happier than spending, say, the maximum amount that various calculators would say one could spend on a mortgage.

I realize that we live in tight times and many people don’t have much choice about where the money goes. But plenty of people do have choices. I think that part of being good stewards of our resources is being mindful of them. It’s an ongoing process — like teaching myself to stay out of Target — but a worthy one nonetheless.

What’s worth the money for you, and what is not?

(photo courtesy flickr user epSos.de)

14 thoughts on “Not worth the money

  1. I realized that I really liked buying clothes for my children. Since my son wears a uniform, and my daughter will soon, there really isn’t much to buy. Plus, like your friend’s restaurant example, we can support small brands and Etsy shops. There’s something really fun in looking around for dragon tee shirts that my 7 y.o. will love. It’s a small splurge, but it is one that gives me great pleasure. And for my daughter, I love the idea that buying high quality special occasion dresses might create a few family heirlooms. We have one dress that has been handed down three generations and counting. I’d like to add another one or two to that collection.

  2. @Abby- Heirlooms are such a foreign concept these days…the idea that you would be able to re-use anything in the next generation (and actually use it use it, not just look at it on occasion like an old photo album) is pretty mind-blowing. Either people have gotten less careful with stuff, or stuff was better made. Probably elements of both.

  3. A big-ticket item that’s not worth the money for me is cars. I’m fortunate to live where I can bike to work or take public transportation most of the time. We do have two cars because we need them for trips and kid chauffeuring, but one is a Kia spectra and the other is a Ford Focus wagon, both bare bones, manual transmission, without bells and whistles. We pay cash for them and drive them for about 7 years until they become money pits and then sell them and get new ones. They get us where we want to go, when we need to, but the whole car-as-status-symbol thing is really not worth the money.

    1. @Karen- Yep, cars as status symbol stems from the positional goods issue. The human tendency is always to spend more on things people can see and compare, and cars are a big one of those. But it’s such a mistake because we adapt to them so quickly, but have to keep making monthly payments for a while. Better to pay cash and get whatever works to get you where you need to go. I’m happy to have three kids, but one of the few times that gave me pause was when I was shopping for cars and realized I was going to need to buy a bigger one, and couldn’t just do a little Kia or something similarly cute.

  4. You should look on Etsy for a new handbag. I bought one there for my sister for Christmas, and saw several I wanted for myself, too. But didn’t get, because I have two perfectly good ones right now.

    For me, spending time to save money is not worth the money. Time is at a premium in my life right now, money- thankfully- is not so tight.

    1. @Cloud- good call on etsy. Checking it out. The problem is what I want is very specific. I want soft leather, some silver hardware, a bit of structure and (the kicker) I want it in purple. I guess I could go for a deep burgundy red too. But I’d like purple. This is really taking up a disproportionate amount of my mental space at the moment (and I have no one to blame for this “mental load” problem but myself). BTW, I think I will do a post about mental load at some point too.

  5. Salon highlights! They can cost around $100. I just dye my hair with ammonia-free, semipermanent hair color. If you get the right shade, it looks natural. And $8 a month is better than $100 a month. I’ve seen salon highlights that look great, but for me they’re not worth the cost.

    1. @Susan – I am so with you on this one. $10 every 6-8 weeks for a box of L’Oreal Preference shade 9A (ash blonde). Put it on a certain number of strands of hair and poof! Highlights. Just the way I like them. After 15 years of doing this, I think I’m actually pretty decent at it, at least on my own head.

  6. I had the “sale” purchase realization when my husband and I had to share a closet after our second child was born. I had to go through a purging exercise and came across a lot of things I bought because it was such a great deal still had the tags hanging on them.

    That was when I stopped the “it’s on sale!” clothes spending. I try to buy what I really need, and I’ve even learned that spending a little more for something nice that fits me well gets a lot more use than buying something cheap and trying to make it work.

    I live and work in the DC area, so the “status” images are everywhere. I have moments where I really want a new car, not because I need one but because I feel I should have one. But like Karen said above, there is nothing wrong with my simple 8-yr old Honda CRV. It’s running just fine with regular maintenance and upkeep, and I don’t have a car payment. 🙂

    1. @Amy- curiously, I just read a statistic in Real Simple (citing Bundle) that DC residents spend the most per capita on clothes compared with anywhere in the country. $263/month vs. $142 nationwide. So yes, you’ve got some status symbol seeking going on there!

  7. I’ll bet rural Oregon is way below average. Corvallis, town of 50,000 + college students, has a Kmart. No Old Navy, no Walmart, no Target, no Gap, no Kohl’s, no Costco, no Shopko, no…

    1. @Twin Mom – well, it seems like it would be hard to do $142/month/per capita damage at K-Mart but… you never know!

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