Think of the last time you spent money on something. A meal, a watch, toilet paper, an apartment. How did you come to justify paying what you ended up paying for it? Did you justify it at all? Did you begrudgingly pay more than you thought it was worth? Or did you high five yourself for paying less than what you felt was the fair price?
Know What You Value
The question for me is, what parts of a purchase make up the majority of the value for me? Everyone perceives value differently. If you always have a fixed amount of money, you will eventually find yourself compromising on something. Compromising means prioritizing the high impact things while giving up the low impact things.
Last weekend, a friend and her husband came over, and the conversation ended up at how my boyfriend and I split groceries. My boyfriend doesn’t want for much, but when it comes to groceries, he has very strict standards for quality. We used to buy a ton of meat at the farmer’s market near our apartment. Super high quality, organic, grass fed, grass finished, really expensive meat. The stuff you can’t find in the organic meats section of Trader Joe’s. As someone who never actively sought out organic options, I felt deep financial anxiety every time we went grocery shopping. $35 for one giant pork shoulder that lasted 1 meal between the two of us? At that price, why am I cooking at home and not eating out?
I told our friends that at some point, I really had to put my foot down. I just did not value high quality groceries, and meat specifically, to the same extent my boyfriend does. I’m more of a Trader Joe’s organic but if not it’ll do type grocery shopper. I ended up suggesting we buy less meat in general as well as compromising on which cuts we bought. Instead of buying whatever caught our eye, I suggested we make a conscious effort to ensure the majority of the cuts be less expensive ones.
Interestingly, my friend asked, “Why would you buy the less expensive cut and then have to eat a dry subpar steak when you could spend $4 for the real deal, a nice juicy tender steak? It’s not even worth the money to eat the dry one.” This was an interesting question because my value system and hers clearly differed.
Know How You Value
She valued the extra refined experience of eating steak much more than I do, to the point that the less expensive cut had almost no value. For me, I value the steak only to the extent of it fulfilling the purpose of tasting pretty good, but most importantly, being an affordable meal. Of course, there are times I value the steak enough to pay the extra $4, but more often than not, my default says that extra cost is not worth it. My boyfriend values the health benefits of the food more highly than me, so he’d rather starve than eat meat injected with antibiotics and hormones.
There’s really no right or wrong when it comes to our personal values, but we all make tradeoffs based on price differences. We make price tradeoffs based on how we value that difference in quality or quantity of what we’re paying for. Would my friend still pay for the better cut of steak if, for example, it cost $10 more? What about $20 more? Would my boyfriend still value the health benefits above all else if the steak was $10 more or $20 more? Would I be willing to pay an extra $10 or $20 for that cut if there was scientific evidence that the cheaper cut caused cancer? Etc…
To give another example, my boyfriend recently got gifted a custom made tshirt. But unfortunately, the tshirt was printed on a cheaper tshirt base. The roughness of the fabric makes the shirt unwearable–it simply isn’t comfortable against the skin. So while he still values the custom design and the effort of the gifter, he gets the majority of the value from the wearability of the tshirt. By just spending a few more dollars to print it on the typical American Apparel tri-blend would have made all the difference in the value of the shirt (at least to one person). Others don’t care about the comfort of their tshirts, or the difference in comfort is not as big a deal. The person who views clothes as basic protection against the elements doesn’t care nor does the person who’s run out of clean laundry.
Question Why You Value
So it seems like there are totally great reasons for why we’re willing to pay what we pay. Then why is it important to question our values? Because as much as I’d love to believe I consciously think through every money related decision I make, that simply isn’t the case. Sometimes value isn’t obvious. Sometimes the things we pay for aren’t really providing the value we think it might be.
3 years ago, I found myself buying books. Buying a good number of books. The only unfortunate thing was I never read 90% of them because I would get busy or I would get excited about a different book by the time I received the first one. While I highly value the knowledge and perspective that books offer, how does buying books but never getting to read them really align with those values?
Taking the time to think about why I thought spending $10-$20 per book was worth it led me to realize what I was really trying to buy was knowledge that would one day make it into my head. What’s knowledge that never makes it to my brain worth to me? What’s the potential for knowledge worth to me? $0. Once I realized that, I was able to kick the habit of continuously buying books. Now I only buy books when I’m not already reading another book.
This works in reverse too. Questioning whether you aren’t spend enough money on something that could be worth it to you. Earlier, I gave my boyfriend’s grocery habits as an example. His grocery spending completely freaked me out. But it also made me really stop and think. Do I really value my health and longevity so little that I’m not willing to understand the potential upside to buying higher quality groceries? Do I really know 100% as a fact that organic foods are “just marketing”? These were all things I believed strongly 5 years ago, but sometimes you need to stop and really question where your values lie.
For many things we can spend our money on, the value doesn’t come immediately. Get to know yourself. Not understanding what you really want out of something you’re paying for can cost you some real money! That money might be serving you better growing in your bank or in your investments. Spend less on what doesn’t actually align with your values, and more on the things that do. All it takes is asking.
What values are on your mind when you’re about to make a purchase? What have you purchased that ended up not servicing your values?