My brother recently got a new job with much higher pay than he was previously making. After getting the job, he bought himself a motorcycle, something he’s wanted for a while, and he’s incredibly happy with it and proud of it, even driving it to work to save on fuel costs and saving on motorcycle insurance. For him, it was a good purchase – he’s worked hard and has desired a motorcycle for a long time, and acted on it when the situation finally presented itself.
Naturally, this whole experience got me thinking about my own purchases and I made a pretty interesting realization.
The single biggest change I made to my spending habits is that I finally became aware of the total experience of a purchase.
When you buy something at a store, many people think that the experience of the purchase ends as you walk out the door or as you’re enjoying the product. Not so. The total experience of a purchase ends when you’ve completely recovered the value spent when you made that purchase. Let me give you a clear example from my own past, in mid-2005 (before I had my financial crisis and was still spending without much control).
My Total iPod nano Buying Experience
In September 2005, Apple rolled out their iPod nano. I was already an iPod owner at the time, but the new nano models were so small and neat that I just felt compelled as a gadget lover to run right out and buy one, blowing $200.
That initial purchase rush was quite fun. I gave over the $200 and got my nifty new iPod, which I quickly loaded up with music and pictures and took around to show my friends so they could be suitably impressed by my new gadget. Those first few days were pretty fun.
But, you see, I already had an iPod, and besides that, I didn’t even use that iPod a whole lot. I would use it while walking around, but I did most of my music listening directly from my computer or out of my stereo system at home.
I also found that after just a week or so of light use, my nano was already developing little scratches. I started storing it in a pouch, which helped, but at that point it began to seem indistinguishable from my older iPod, except with less storage. My positive feelings were definitely beginning to mellow.
Of course, I’d bought that iPod nano on credit (much like many of my other purchases during that period in my life). So when the credit card bill came in, I didn’t have enough to pay it off, even though there was a nice new $200+ charge on the bill. Instead, I made the minimum payment and a bit more and felt pretty sick to my stomach about my rather large credit card balance. Yep, more negative feelings as a result of the purchase.
The next month came and went. My nifty new iPod didn’t get used very much. I couldn’t find the charger for it for a while, so it sat unused while I primarily used my old iPod. I’d see it sitting there, unused, and feel bad. Another credit card bill came, packaged up nicely with some more negative feelings.
It took me almost a year to get that credit card paid off. All told, that nano probably cost me $250 – and the net feelings and use that it generated were negative.
Using That Experience Today
That experience, along with several similar ones, has left me with a very strong sense of the whole picture of what I’m actually buying when I make a purchase. I’m not just taking home something nifty to enjoy – I’m also taking home the bill. I’m not just taking home something to play with today – it’s something that I should be enjoying over the long haul if I’m putting significant money into it. Could I perhaps get this item cheaper elsewhere, or do I even need it at all?
Is this purchase going to be a net positive, or is it going to be another iPod nano?
I ask myself this each time I go to make any kind of purchase that might even be slightly unnecessary. That thought process has talked me out of countless purchases over the last couple of years.
In the past, I’ve strongly advocated using the ten second rule whenever you’re considering buying an item. The questions above are the questions I ask myself during those ten seconds – and they usually talk me right out of buying the product.