Everything we own has a cost. Something we possess often entails in an expenditure with no hope of income. But it’s more often than not a problem.
Cost can be expressed through different ways, the most obvious being money. That’s the tip of the iceberg.
Note that every time I refer to “items,” I am describing any type of physical object you may have/buy.
Buying, purchasing, or getting something will inevitably lead to several issues:
Loss of money
Items can be bought new or used, so you already need to spend money. Even if it’s a donation from someone, storage and space is a cost. Most families could live in smaller homes, if the space was optimized, and rooms emptied out from unnecessary items.
A good rule of thumb is to consistently unclutter. In general, reducing consumption can only be beneficial to your wallet, or that golden retirement (or fancy trip).
Loss of time
When you buy something from the Internet, or in a store, you’ll end up spending time on that purchase. It could be time spent researching, time spent picking up the item, or anything else like that.
In other words, buying an item, and maintaining it, costs time.
Loss of energy
The more stuff you have, the more time you’ll spend cleaning, maintaining, and storing all of it.
Spending an hour dusting instead of twenty minutes makes a huge difference when it comes to your mood, and energy.
Loss of choice
Once you’ve bought something, and it’s put away someplace, it will limit you from getting anything else. The item takes up some room, and cost you money.
Personal finance is kind of like life: it’s all about making choices. You can’t buy all the things, let alone store them.
Loss of serenity
We’re going into less practical issues here, but it’s still a valid point for most. Having a home full of trinkets, or useless collections may not only be a problem on a physical level, but also in your mind.
You’ll constantly obsess over all these small items that you need to take care of. Protect, clean, polish. Ultimately, the objects are the ones influencing you, not the other way around.
Items have a cost way above their purchasing price. Each new addition leads to constraints that you wouldn’t aware of, if not for looking straight at them.
Obviously, some give us value, mostly because they have an actual purpose (vacuum cleaner, washing machine, fridge, TV). Others, more decorative, don’t bring anything else to the table (no pun intended).
I’m a fan of simplicity. Less is better. Taking into account the overall “global cost” of something is essential.
Cost versus Value
We’ve already dabbled into “the need for stuff,” however, since we’re here talking about cost, the price of an item is rarely equal to its value.
On some level, the value of an item is related to services and pleasure it provides, whereas its price is the sticker on top of it.
Value, on the other hand, depends on our estimate. It’s kind of the price we would be willing to give it, not the one displayed.
What is interesting is that oftentimes price and value are very distant from each other. That’s why I think it’s better to think in terms of value.
In fact, most of the time, unless you buy the same thing frequently, you have no idea of the price of an item. Of course, the price is not determined randomly. It depends on the construction process, the novelty of the subject, the margin of the manufacturer, all that good stuff.
The fanciest of smartphones sees its price fall by 50% in one year, despite the fact that it provides the same services twelve months later! In my mind, these are the “items” you want to buy used, or second-hand. The value stays the same (assuming it’s in good condition), only the price drops.
A friend of mine cuts his own hair (military cut). A clipper costs $30 on average, but he saves up to $300 a year. The cost is $30. The value is much greater: if it works at least 3 years, almost $1,000 will have been saved. That’s a more pragmatic, financial value.
If you’re somewhere in the mountains, a Swiss Army knife will be worth its price more so than in a city.
Now that we understand that price and value are two different things, we can consider a simple rule when buying an item:
Buy something when the value far outweighs its cost.
That’s not even a difficult thing to do. Measure the usefulness (or happiness) it provides in relation to how often you’ll be using it, and its durability.
The idea is to have the minimum amount of items, at the lowest cost compared to the high-quality value.
What works for items also works for services. Take the example of courses or training. You’ll acquire knowledge, and a better salary.
Of course, the value of such services is difficult to measure when you get them. Especially since services are usually more costly than objects/items, and their values are measured over a longer period of time.
Next time you get something for yourself, try to think about all these things.
Is it really worth it?