Updated on 04.03.10

The Mythology of Spending and Mental Anchors

Trent Hamm

I have a quick four question quiz for you to run through in your head. Just give your snap response to these – don’t think about each one too much.

What is a wedding supposed to cost?
What is an automobile supposed to cost?
What is a home supposed to cost?
What is a three week vacation for a family of four supposed to cost?

For each of these questions, you came up with a number of some sort. That number is based on your own life experience coupled with what you’ve observed others doing and also the influence that media has had on you. That number, in other words, is your “mental anchor” for what that item should cost – and it’s often the basis of judging whether something is reasonable in price or not.

Of course, anyone who has read The Simple Dollar for long probably recognizes one thing immediately: that anchor price is nothing more than a sticker on the box. It doesn’t represent what you’d ever actually need to or have to pay.

I’ll show you what I mean.

According to CostofWedding.com, the average American couple spends $20,398 on their wedding, and that’s not too far from the mental anchor of the cost of a wedding averaged across all economic levels.

The problem, of course, appears when people begin to truly use the $20,000 figure as a mental anchor for their wedding. “We have to spend that much in order to have even an ‘average’ wedding?” people ask themselves. Then, in order to have their day be ‘special’ or ‘exceptional,’ they spend an amount that’s far over the top, putting them into debt for quite a while.

I’ve witnessed at least two couples do this with their wedding – they invent a mental anchor of what it should cost, chase that mental anchor, and wind up with a gratuitously expensive wedding that ceases to actually make either the bride or groom all that happy in the end.

That same experience repeats itself with cars. After all, there are an awful lot of people out there buying new luxury cars, aren’t there? They have an anchor in their head of what the average is and they must beat that average.

Here’s a novel idea. Forget what your mind is telling you about what things should cost.

Instead, figure out what you actually need (or want) and then strive to minimize the price on that.

So, for example, if you’re thinking of getting married, simply sit down and make a list describing what your wedding will be like. Revise it a bit and make sure both of you are happy with the list. From there, find the best deals you can on each item on the list.

Voila! You’ve created a wedding you’re both happy with and you’re not comparing it to the idea of what a wedding (or wedding cost) should be. Why? Because it doesn’t matter what a wedding “should” cost. It only matters what your wedding costs, and you should strive to maximize the value of your dollar while having the wedding you both want.

The value of something isn’t expressed in dollars. Everything has a cost, but that doesn’t represent the value at all. The value is what you get out of it. Does it make you happy? Does it meet your needs? Those are the things that matter, not matching what someone else is doing.

If you spend all of your time comparing the major things in your life to others based on their cost or their perceived value, you’re saying that what others want is more important to you than what you want. Never let any important choice in your life be governed by what others want.

This is your life. Live it the way you want. Ignore what everyone else says you must have and says you must spend on it. This is about you, not them.

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  1. I think there is a common misconception that more money spent translates into “better”. Especially for something like a wedding, a couple doesn’t want to seem “cheap”, so they go all out…afterall, this is their big day, it must be perfect! Once a person can break through the block that more means better, then they can begin to maximize their dollars…but how do you get past this deeply ingrained belief?

  2. Kathy says:


    Unfortunately, with weddings, you’re also dealing with family members who may have the ingrained belief that their child’s wedding means that they must put on a show to impress their friends, or that if you don’t have the big ceremony with the flowers and the big reception, it’s not a real marriage.

    Notice I said “marriage”, not “wedding”. Sometimes people tend to confuse the two. During the crazy times of wedding planning, it’s easy to forget the difference.

    My ex in-laws were this way. I wanted something small, and my ex MIL actually said out loud within my hearing, that my idea of what I wanted to have was not a “real wedding”. I still had what I wanted anyway.

    When people start realizing that a wedding is just “one day”, a “marriage” is every day that comes after, and how much the bride’s dress cost has no bearing on how the couple will weather the storms that happen during a marriage (although how the couple handles the planning and the stress of planning a wedding can be telling in how they deal with those future storms), then they will get past this ingrained belief.

    I just attended a wedding yesterday where it was obvious that the couple and their families did a lot of things themselves to save money (and I don’t mean that things looked shoddy). It was a very nice wedding and a fun reception. The material things did not make it fun. It was the attitude and the mood, and not how much things cost.

  3. et says:

    Good post! With home buying, not only is the mentality that more $ on a home is better, but that every time you buy a new home, it needs to cost more than the one you’re moving out of. Plus, I’ve found most real estate agents are facilitators in getting you to spend more than you really intended. If you tell them the actual amount you want to spend on a house, they start you with that as the lower or middle range of houses they show, and it’s very tempting once you see what is out there for only a few $10K more, to go with the higher end & easy to lose sight of what your max had originally been.

    One way around this is to lowball what you tell the salesman, & don’t see one before you are very clear with yourself (& partner of course) on what you are able to pay and what you really need.

    (You can plug in “car/car salesman”, “wedding/ wedding consultant or vendor” or “vacation/travel agent” in the above & it still makes sense!

  4. Stephanie says:

    Our wedding was very DIY, we rented a dance hall, my husband needed a new suit and dress shoes anyway so that was his wedding suit (now interview and funeral suit) and my dress was $300. We had a potluck reception with no alcohol (we were willing but the insurance was amazingly expensive). Some may have thought the potluck was tacky but we had several people come to us and say that our food was better than their weddings and they had spend $10-20,000+ on just the caterers!
    We had nearly 150 guests and spent $5000 but almost half was on the prenup- I have a stepson and it was a good idea. Everyone had a blast and in the two years since, three couples in our circle have had similar weddings.

  5. Brittany says:

    Spot on article, Trent, and spot on comment, Kathy. I saw this time and time again when I catered/bartended weddings. And you know what? The people who insisted their wedding be perfect or their marriage wouldn’t be probably won’t have nearly as good marriages as the “Let’s make is as good as we can and deal with everything as it happens” people, because they’re valuing the wrong things.

  6. sashie says:

    I would take this even further and say that the answer to each of those questions should actually be, “What I can reasonably afford”.

    I disagree with the idea of starting wedding planning what a wish list. I think wedding planning should start with 1. A real discussion of what can truly be afforded without going into debt. 2. the people that really matter being invited (not people invited to impress) and then 3. what kind of wedding can we have that honors the first two pieces. I totally agree that you can have a wonderful wedding without spending a fortune. We had ours at a beautiful location (Chicago Cultural Center) with a beautiful wedding reception following it (at the Pump Room) for less than $1500. Including my dress. My husband already owned several suits due to the nature of his career.

    This same thought process should go into each decision listed. How much can I afford to spend on a car? Who will need to use the car/how will it be used? What kind of car do I want – last thing to really think about.

    I think a house might be the hardest thing to come up with an answer without a lot of thought as to what affordability means with buying a house. But I think again, it probably should come down to what number do I reach when I figure out how much house can I buy with the money I have saved for a house purchase (not including emergency funds, retirement, etc) being *at least* 20% down on the house price. Then, double checking the house price against your own income (shouldn’t be more than twice your annual income and should be less than or equal to 1 year’s income if at all possible (and is possible in many places). Then choosing a house that falls into those money parameters that will adequately work for the people who will be living in it.

    When you start with figuring out the real number that ou can spend, everything else usually falls into place quite easily because you have already constrained choices to a much more reasonable level.

  7. Julie says:

    I once read that the reason weddings today have become such huge spectacles is because the transition into marriage has become much less momentous. Back a few hundred years ago, moving from “single” to “married” was a huge ordeal. It probably involved the bride moving out of her parents’ home for the first time, possibly moving out of her village, probably having sex for the first time… it was scary! The wedding, consequently, was often a small affair.

    Now, though, men and women often live together before getting married (possibly in a house they co-own), they’ve almost certainly had sex already, and maybe they even have kids. The difference in lifestyle before and after the wedding is much small, so the wedding itself becomes a much bigger affair.

    I have no idea whether this is true or not, but the reasoning makes sense to me.

  8. Megan says:

    I think it’s also important to mention the other side of the coin, too. My fiance and I have been planning a wedding this year (almost done — two months and we can be done with this nonsense and get on to the marriage part of our lives). We’re both pretty frugal people (him more than me) and when we started planning, we both balked at the price tags. We tried setting budgets of $1000, $2000. But when we factored in what our parents wanted (and they’re the ones paying, so what they want DOES matter), to have even the simplest of catered events was $5000, not including a venue.

    We had a lot of difficulty with that, because of all this sort of stuff: “it’s just one day”, “do what YOU want, not what everyone else wants”, and “it’s silly to spend that much money.” What we’ve ended up with is a 10k wedding, which to me seems horrifically wasteful, but to do it for less, when we had to find a venue because no one has a backyard, and we found a non-traditional (read: cheaper) venue, and we’ve worked with our caterer to bring down cost (and self-catering will just make everyone involved miserable), and we both have big families, so an 80-person guest list is as small as we can go without alienating family, and we’re already skipping flowers and separate church/reception locations and the entire wedding aisle at the craft store… Well, I just don’t know where we could have possibly trimmed the budget further.

    And it’s really, really hard to be in the situation of getting guilted at from one side for not spending enough, while simultaneously being shamed from the other for spending too much. After all, what’s the point of hoarding all this money from frugal lifestyles if you can’t spend it on the big things in life that you WANT to spend it on?

  9. Someone says:

    Just want to make a note about “most real estate agents” – as someone who does hold a license, I am really tired of the perpetuation of the myth that we push people into buying more house than they “need”/”want”/”can afford”.

    First, we have a code of ethics we are held to, and it specifically prohibits self-dealing. Our clients come first. Second, it is not worth bothering to “get” someone to buy 10K more of home. Our proceeds on each 10K of home you buy can be as little as $150. Oh yeah, we are real money-grubbers.

    What REALLY happens is that clients tell us what they want at what price point – and more often than not THEY DON’T MATCH. They want a luxury home for a shack price. What’s the compromise? It’s “well, if you go up a little in your price point you might actually get something you LIKE.” Public perception is that we’re trying to push people. NO, we aren’t. We are dealing with optimistic but UNREALISTIC clients who find out they don’t like what is available at their bargain steal dream price, and finally they see the light and buy what they like…voila, it’s a little more than they hoped to pay. What other choice do they have? What other choice do *we* have?

    Stop blaming real estate agents, ok? It’s BS.

  10. Someone says:

    (^ Aimed at et, not Trent!)

  11. SF says:

    I have a question about the questions! Who takes a three week vacation with a family of four? When my kids were young I only got 2 weeks of paid vacation a year from my employer; by the time I got three weeks my kids were teenagers. We took a one-week vacation – usually camping in tents in state or national parks. We had fun and didn’t spend a lot.

  12. Gena says:

    I am 100% with you on this! My husband and I saved SO much money on our wedding AND made it fabulous by completely tossing the notion of ‘wedding dresses usually cost between $X and $Y, the average cost of X is $Y, buying X wedding item at Y business or website tends to cost $Z’ etc etc etc.
    We thought OUT of the ‘wedding’ box many times and set limits according to what we’d be willing to spend, rather than on the ‘typical’ costs.
    Somehow this notion seems to be lost on many of the brides I stay involved with on various wedding blogs and webforums!

  13. Anitra says:

    People have commented on our house, our cars, and (five years ago) our wedding, and how “nice” they are. Not showy, but nice, and we feel good about them.

    For all of them, we pretty much went through this process. (1) How much can we afford to spend? (2) What are our priorities? (3) How can we save money on the things that are NOT priorities?

    For our wedding, this meant hand-making or doing without things that weren’t as important to us. (Who needs a $1000 dress or a $2000 cake, anyway?) For our cars, it has meant buying 2-4 year old used cars that we love, rather than buying the same car new for twice the price. And for our house… well, it meant accepting that, if we wanted to live in a house with a yard, we would have to buy a fixer-upper that was not as close to my husband’s work as we would have liked.

  14. Shevy says:

    Funny, yet again I’m not agreeing with this for a few reasons.

    FWIW, my answers were:

    But my snap response does not necessarily correlate with what I would pay for those items.

    I started to explain, but realized it would be better as a post on my own site. My comments on here tend to be long enough….

  15. RDT2 says:

    I’ve seen a few couples who seem to have gone crazy planning their extravagant wedding. So much effort for just one day of a hopefully life long marriage.

    What my wife and I realized is that is too crazy and expensive to have a huge wedding not just for ourselves but for our family and friends that would have to fly in. Instead we had a small, private, immediate family only wedding on the Chicago lake shore (no permit needed for less than 50 people). Afterwords was a reception dinner with the same people.

    That summer we had a family and friends BBQ/reception at my parents’ house and then across the country to my wife’s parents’ house. All in all it was fairly cheap for everyone involved as we were the only people traveling. Not to mention we were the guests of honor at both bbq’s and had to do no planning/worrying at all!

  16. rosa rugosa says:

    I think this was a good post; I especially liked the line: “Everything has a cost, but that doesn’t represent the value at all. The value is what you get out of it.” The message went beyond those old Joneses, and encourages us all to look at the true worth of something independent of the price tag.

  17. Vicky says:

    Love this post!

    I had a TINY wedding that cost about $1500 total. We had it at my uncle’s house, my grandmother cooked, we had a local band from my uncle’s church, and my grandmother and aunt made all the decorations.

    And I still rode to the alter on a horse. It was everything I wanted, and we didn’t have to spend $20K on it. I still look back on it fondly and I’m so glad we didn’t go into debt over it, or worry what everyone else thought.

    You’re line about cost not representing value is spot on.

  18. Brenda says:

    Interesting. I’m trying to rework my own relationship with money. When I remember to apply it, the process that seems to work best for me is to convert the price into hours worked to earn the money the item will cost. (Not using a straight hourly wage, but a true wage ala “Your Money or Your Life” configuring.)

    When I use this process, I find that a lot of items no longer interest me, no matter how low the price tag.

  19. Todd says:

    My numbers were


    but I’ve never spent quite that much on any of the above. I never realized I was so low rent, although I’ve heard on television that the averages are $20,000, $25,000 $250,000, $10,000. Not many people I know spend those amounts.

  20. moom says:

    For three of these it is possible to spend very little or very much depending on preferences. But in any given city it is very hard to spend below some number on a house, which could be a very high number. It’s hard to spend below $300k for an apartment and $400k for a house where I live for example. We rent. We could spend 30% less perhaps by getting a smaller apartment and moving further out of the city (and spending more on commuting) but it is hard to go lower (except by say sharing with another couple). We spent about $3000 on our wedding and could have spent $500 in theory (you have to pay for a celebrant etc.). We paid $16,000 for our car second hand and obviously could have gone much lower. But we are both near the median and near the bottom in housing expenditures.

  21. jgonzales says:

    I looked at those numbers and always had 2 answers, my Midwest answer (where I grew up) and my Southern California number (where I live now). This was especially true for the house price. Talk about the price not matching the value!

    As for weddings, my was around $1,500 overall. It was small but it had the most important things to me, a church and my husband. I made my own wedding dress from the pattern used to make my mom’s wedding dress. We had a sandwich style lunch right after the wedding. Guests actually sat at the tables for the ceremony. Our church scheduled a rummage sale in the front parking lot on the same day. Yet I still get comments on how much people enjoyed it and that was 5 years ago.

  22. Anne says:

    Wow! I don’t know if I’m hopelessly out of date or just a genuine tightwad… My numbers were:


    As I reflect on it, I see that those numbers ARE based on my personal experience, except for the house (less than $100,000). Seems like that says something about me…. but I’m not yet sure exactly what.

  23. Daniel says:

    An insightful post, and it highlights the fact that most people cannot help themselves but compare what they are doing to what everybody else is doing. To me, stepping back and emotionally disassociating yourself from the “herd” is the first step to curing oneself of comparisonitis. It’s the first step towards conquering money.

    Casual Kitchen

  24. Kat says:

    I had to laugh at the 3 week vacation…never had one of those…wouldn’t know :) I think thrifty folks sometimes might not see the need to take off that long from work. I suppose ideally for me it would be
    $75,000 (build it ourselves to pay off early)
    no clue but 1 week maybe $400 or way less depending on if we camped or not?

  25. gizmo says:

    It really is *your* life, that is so very true, yet how hard it is to follow through when want you want is so very different from what everyone else seems to want. My wedding cost about $30 or so if I remember correctly. I never wanted what would be called a wedding (the whole church thing, lots of people, wedding band, or even honeymoon) but I did want to get married so my husband and I phoned the Justice of the Peace in our town, ordered a cake from the local Wholefoods, invited a few neighbors over, and played whiffle ball after the very brief ceremony (I believe our team won, btw). I spent many years agonizing over not having had a “real” wedding and dealing with comments and opinions from others (mostly my family) over what we “should” have done and were supposed to do. And now, 20 years later and still married and without any debt, I’m thrilled that we did what we did and we are who we are and we’re still rolling through life together and I wouldn’t have it any other way. But it is hard to go against the grain, no doubt about it.

  26. Amanda says:

    I actually had 2 ‘weddings’ with my husband. The first was 8k, the second was $300. The first was everything I wanted (and 60 people) and the second was immediate family only (12 people) and a delightful day.

  27. jj says:

    Great post, Trent! Thanks! Regarding the wedding part, we did it fairly frugally ($5,000 total) 9 years ago but would go even further if I had it to do over again today! My dress was $300, the in-laws paid for the cake, me and my girlfriends did the decorating (lots of tulle and wholesale roses and free ivy from the woods!), a friend made homemade wine in specially labled bottles with our engagement photo, the BIL made special Cd’s for every guest with our favorite songs on it. The bulk of the budget went to a catered sit-down dinner for our 40 guests. It was great, but the marriage has been even better!

  28. SoCalGal says:

    I think GIZMO & I were separated at birth! My wedding almost 30 years ago cost just under $100 out of pocket. We bartered for the flowers & my ring. We now live debt free in southern California and my answers for the main question are:
    whatever you can afford & are comfortable with. Who cares what others are spending?

  29. Brent says:

    Bought a house for 135K, but that is far below my snap price for a house. My snap price reflects what I think other people would spend, not what I would. The first real estate agent I worked with wanted to know what I qualified for, but not what I was willing to spend. Whenever I mentioned a negative about a house, she telling me about houses outside my range. I know that a house is a compromise. Can’t live without, can’t live with, and everything in between.

  30. asithi says:

    I guess I am the only one that spend “the average $20k” for a wedding here so far. I have no regrets and we are not in debt. Even now, when I walk through my house and see the beautiful framed pictures, it still brings a smile to my face. But then, that is what frugality is about, spending your money where it matters and cutting back elsewhere.

  31. Archirat says:

    I just had to respond to this.
    When my husband and I got married, we “piggybacked” the event onto an already scheduled family reunion for my side, which was brilliant because his family lived on the west coast anyway. So while you could count travel, it was already planned. We are both LDS, which meant that the actual cost of the wedding itself was free and in a beautiful LDS temple. (Guest restrictions, but having been raised with that expectation, it was perfectly fine with us.) My wedding dress was barely $200. My husband’s suit was more expensive, but he wears it almost every Sunday. The reception was hosted in my grandmother’s backyard and my aunt loaned us the use of her condo for a very short honeymoon. It was perfect, I couldn’t have asked for more and my family wasn’t in an insane amount of debt for it.
    I think our $2000 car was more expensive than our wedding.

  32. littlepitcher says:

    Bless you, Gizmo! My wedding cost under $50, my dress was chosen to be usable for other occasions, and the marriage lasted almost ten years, compared to the enormous expenditures for those of others’.
    Something about the entire concept of huge weddings seems so patriarchal and third-world to me–the “princess” role-playing prior to the haggard domestic actuality, and the conspicuous consumption to impress two sets of in-laws and their business connections. Isn’t there a civilized way to accomplish all of this?

  33. Debbie M says:

    On anchor prices – a lot of times these are based on what we know about. If you shop at malls, you have a different idea of what things cost than if you shop at thrift stores. And advertisers spend a lot of money make sure you know about what they want you to know about. So you’ll have to look around and think hard to find out your other options.

    * Weddings – what’s the average price for a party? You could start there and then assume that a wedding might cost a bit more than the average party.

    * Automobile – wrong question. This category should be called “transportation.”

    * Home – look at your current rent. That’s a good starting price. Then remember that buying a house includes not only the purchase price (or principal + interest) but also property taxes, homeowners insurance instead of renter’s insurance plus an estimated 1-2% of the house value each year for repairs and upkeep, plus whatever extra you would spend on decorating, furniture, renovations, gardening, etc. that you wouldn’t be spending if you rented. Also note that a house can eventually be paid off, at which time you’ll only be paying for property taxes, insurance, repairs, and fun stuff.

    * Vacations – I actually have a few different numbers for this. There are driving/camping vacations, flying/hotel vacations, and foreign vacations.

    I agree with et that sales people start with the maximum you can afford as the lower end of what they show you. Maybe try telling them half that amount and see what happens.

    @Someone – My real estate agent never showed me a house for below my “maximum” price. All I wanted was something centrally located (which she ignored many times, trying to show me things at my price point), something with a solid foundation (which she ignored once) and something with a big living room. She should have shown me cheaper things, too, even if they were crappy, broken-down shacks in the middle of nowhere. Showing people things at both the price they claim to want and that have the features they claim to want would be educational. Real estate agents know what is actually available and do need to educate us about that. (For example, I want few, small bedrooms but a big laundry room–I know there’s no such thing!).

  34. Steve says:

    A three week vacation for four would, for me, quite possibly be cheaper than a one week vacation for two.

    That is, the former would (as I envision it in my own future) be a camping trip, and the latter would (based on my past choices) involve jetting off to London for the week.

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