Money at 30: The Lies We Tell Ourselves About Spending
When brainstorming ideas for my column today, I told my wife that perhaps I could share a tip about saving money on Halloween candy by attending one of the Walt Disney World parties we went to this week instead of buying sweets from the store. Apparently not realizing that I was joking just yet, she quickly noted that, in addition to these event tickets costing over $100, people would also need to travel to Florida and likely book a hotel room just to “save” about $10 by getting “free” candy. Obviously, this example is extreme (I was totally kidding, after all), but it made me realize that we occasionally use such logic — or illogic, as it were — to justify certain purchases.
Here are a few examples of ways our finances can be compromised by tricky tactics or by the lies we tell ourselves.
The coupon conundrum
On the whole, coupons can be a great tool for saving money. However, the trick is that the coupon needs to be for something you were planning on buying anyway. Otherwise, these promised savings may actually lead to more spending.
Without naming names, there is someone I know that has previously said such things as, “If I don’t use this coupon before it expires, it’s like I’m losing $20!” Again, this may be somewhat true if you end up buying the item sans coupon later… but it’s not a very helpful way to look at the matter overall. Letting a coupon “go to waste” can be perfectly fine whereas spending money just to utilize your discount is really the issue.
In my view, the best plan of attack is to let a planned purchase dictate your search for coupons instead of letting coupons inspire your need to purchase something. Meanwhile, you might also make the choice the put off buying something until a coupon is available. Although that approach might sound like the latter of my examples, you can think of more as a long search for a coupon finally coming to an end — thus, it could be a money win.
Ignoring the actual cost
As I demonstrated in my introductory joke, it can be easy to pretend that you’re saving money when the opposite is actually true. Despite my mocking of this, it’s something I’m actually guilty of — and relatively recently. When we moved into our new apartment, one of the notes in my “pros” column was that the utilities would be cheaper than in our previous place. While that was true, those $20 savings pale in comparison to the $400 extra we’d be spending on rent!
Understandably, all of us want to save money and so it’s nice when we think that we’ve come out ahead. Sadly, though, this desire can lead us to ignore some key details. Instead, it’s best to keep perspective and consider the net, not just the gross.
The unnecessary upgrade
Finally, we come to another money mistake I have experienced more than my fair share of. I like to call this “unnecessary upgrade syndrome” — but we might as well call it the “iPhone Effect.” Every fall (or occasionally more often), Apple trots out its new model of iPhone and tries to explain to us why it’s “The Best iPhone Yet!” In truth, though, few people who purchased last year’s model will really benefit from buying the latest and greatest — or at least won’t get nearly as much benefit as those who have been holding onto their devices for far longer.
Considering the role that tech plays in our lives — and its potential impact on our ability to generate income — it’s definitely understandable that many of us want the fastest and most efficient tools possible at all times. Alas, there’s a balance to be struck here as not every “upgrade” is truly worth the financial cost. Therefore, it’s up to you to determine whether it’s really time to invest in new items or whether it’s best to keep your FOMO and tech envy in check.
When it comes to spending money, many of us strive to save and make good choices overall. Yet, despite our best efforts, we’re all prone to making occasional mistakes. Whether retail trickery or some self-deception are partially to blame for these errors, what’s important is spotting them and making course corrections when necessary. By doing so, you’ll hopefully have more money for items and experiences you truly care about.
Also published on Medium.