When Paying for Value Makes Sense

by Kevin on November 2, 2009

As you browse the multitude of personal finance blogs you will likely hear a common theme: don’t buy it, don’t spend the money, you don’t need it.

Don’t doubt. I definitely feel the same way. Most of us could do with more with less to the benefit of both our bank accounts and the environment.

But what about paying for value? Is there a place for that instead of constantly depriving ourselves or always buying the cheapest option?

Should we focus on minimizing our number of purchases while maximizing value we get from the purchases we do make?

Living Deprived Isn’t Living

While I completely agree with Dave Ramsey’s motto of “live like no one else so that you can live like no one else”, I don’t agree with living completely deprived. And I don’t think that is what he is saying, either.

There is definitely a line between living like a hermit (and never spending money on anything) and living frugally or in a minimalistic style. I am of the mind that living deprived back in your ultra-frugal cave is quite unhealthy. If you never see or interact with your friends, you probably won’t have any.

Maximizing Value on Meaningful Purchases

Unfortunately for most of us this isn’t a problem. We spend, and spend, and spend. So moving toward frugality is usually a good idea.

Moving to a place where you try to cut back on purchases isn’t going to be the most fun you’ve ever had in your life.

It takes some self-reflection to understand what is truly important to you. On these things you can pay for value… buy the better brand, keep it as a line item in the budget, enjoy it.

Everything else? Cut it or cut it back or go generic.

A Story of Computer Audio Purchases

I’ll use an example from my own life to help shape this thought.

I’m on my desktop computer a lot. I’m a blogger and a PC gamer. I spend a lot of time in this chair and a good chunk of that time I need speakers of some sort.

I prefer headphones both for gaming and music as I can keep the sound just on me and not bother my wife. (Bonus: she doesn’t have to listen to the teenagers screen obscenities when I’m gaming.)

On the other hand there are a handful of times each year that I prefer to use my external speakers to listen to music or share a video with a couple of friends.

With these two facts in mind let’s look at the purchases I made in this category.

  • Headphones: $70 Plantronics headset with swivel microphone (for yelling obscenities back at those teenagers)
  • Speakers: the original harman/kardon speakers from one of my very first computers

I purchased those headphones when I was in college. At the time $70 was a lot of my spending money. But I valued getting quality headphones with accurate sound and a decent microhphone. They have been worth every penny and I’ve used them for hundreds if not thousands of hours sitting in this very chair. (Notice, too, that I am still using them 5 years later.)

Compare my headphone use to my speakers. The speakers I have are… okay, but they really should be replaced. They are old. We’re talking ancient in computer technology. I would bet the speakers are at least 9 or 10 years old. I’ve had them since high school. They work… unless you turn the sound up really loud; then the speakers crackle and sound like garbage. But they work, they function, and I only use them a handful of times each year.

There have been several times when I’ve considered replacing my external speakers for a $50 set at a big box electronic store. Each time I stop myself and think about how often I use them. It would be nice to have new speakers, but I don’t value them enough to make the purchase. In fact I would rather spend $100 to replace my headset first!

In these two examples I have maximized my enjoyment and value of the headphones. I gladly spent $70 for them and I would gladly do it again. On everything else such as the speakers, cut.

And keep cutting until the day comes that you decide the value is worth the price.


Matthew November 2, 2009 at 8:36 am

Like food, constant deprivation could lead to a gorge-fest. Plus, if you’re not careful, you could have guilt over what few purchases you do make and never truly enjoy them. All this is to say that there certainly needs to be a balance.

Financial Samurai November 2, 2009 at 11:13 pm

Good analogy Matthew. I went on a 61 day no spend kick except for on food and my bus pass. It was quite liberating actually! Now I can’t help but not spend money on stuff, donno why.

I agree though, it’s all about making more money and keeping your lifestyle the same. Making 6 figures is relatively easy if you want to work at it.


Megan November 6, 2009 at 4:29 pm

I am with Matthew. I definitely think that depriving yourself of any treats at all (take-out, a movie, museum tickets, etc.) will just eventually backfire. DH and I budget $100 a month for entertainment – it’s enough for the occasional splurges, and it keeps up morale.

I think the key to money management is not so much what you earn, but what you do with your money. You can make six figures, but be living paycheck to paycheck; on the other hand, you could make a LOT less, but accomplish your financial goals.

Kevin November 9, 2009 at 10:24 pm

Interesting points! I may have to write on this in the future… thanks for stopping by everyone!

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