Not too long ago, I happened to be visiting a tabletop gaming store that was going out of business. (I don’t think it was due to lack of business – the owner was moving away and needed to close up shop.)
Anyway, the store was holding a “Going out of Business” sale, where all of the items in the store were getting marked down more and more as the closing day of the store approached. When I was there, everything in the store was 50% off and the items with green or yellow stickers were 90% off.
I didn’t actually know that the store was going out of business. I was actually stopping by to purchase a copy of The Resistance to give to someone as a gift.
Anyway, I browsed through the shelves looking for that game. Although I didn’t find it, I did see several items that I knew to be a great bargain. I ended up grabbing about $40 worth of stuff that would have a total MSRP of about $300.
As I approached the checkout, though, I did my usual “ten second pause.” I looked at the items in my arms and asked myself if I really needed any of those items.
It occurred to me that all but one of the items were simply pure impulse purchases (the one item was a replacement gift since I couldn’t find The Resistance). As I looked at the games, I recognized that I likely wouldn’t play some of them for quite a while.
So, I put all but two of the games I was holding back on the shelf. The only ones I purchased were one game as a gift and another game with a 90% off sticker that I had already verified that I could sell on eBay for enough money to make it worthwhile. I put the rest back on the shelf.
Here’s the reality of it: it doesn’t matter how much of a “bargain” something is. What matters is whether or not that item is going to receive enough use in your life to make it worth the cost.
For example, if I’m going to spend money on an entertainment item, I want it to reach a point where I’m spending less than $1 per hour of entertainment that it will provide to me. If I’m not certain that I would like or use an entertainment item, even $1 is too much to spend.
So, as I stood there in line, I looked at the items in my arms and realized that, even though some of the items would only cost me $5 or $10, I likely wouldn’t be playing them enough to recoup the cost. I have other items that I already love and use and I couldn’t honestly imagine that these new items would “replace” them.
You can apply the same philosophy to almost anything in life. All you have to do is figure out in advance how much an item is really worth to you.
For me, the $1 per hour of entertainment is the right threshold for an entertainment item.
For clothing, unless I need something, I’m not going to buy new items no matter the price, as I assess independently whether or not I need new clothes during each seasonal rotation.
For food, I try to stick to purchases that will directly lead to meals. If I don’t immediately have a meal in mind and a day where I’ll be making that meal, I usually skip the food item.
I can give example after example of this, but in each case, if an item doesn’t meet my threshold, it doesn’t matter how big the bargain is – I don’t buy it.
If I do “slip up” and buy it anyway, I view that purchase as a mistake – and I find that the more I reflect on these ideas, the fewer “mistakes” I make.
Why avoid “impulsiveness”? I do have money set aside each month for impulsive purchases. If I want to buy something that doesn’t meet these requirements, I do have some money I can use for those types of purchases, but I cap that amount each month and I plan for it. Thus, sometimes, I’ll also think about how much “impulse” money I have left for the month and use that as part of the buying decision.
The idea behind all of this is simple: don’t buy stuff you don’t need, no matter the price. If you’re buying stuff you’ll barely use, it doesn’t matter how “cheap” it is, you’re still spending your hard-earned money, and that’s never a good choice.