Impulse spending used to be a huge problem for me. How else could I explain all the weird crap I own? Why do I have pink Docs? Why did I spend $60 on a “Dreamy Trudeau” sweater? WHY DO I HAVE SIX PLAYSTATIONS?!? I’m slowly learning though. With most of these purchases, I didn’t consider the true Outcome of owning them. By the end of this post, I’ll get you thinking about your Income vs. Outcome too.
I’m lousy with impulse spending because my photography job has largely destroyed any intelligent relationship I had with money. When I landed a photography booking, it’d usually mean at least $2,000 in the bank, so a $400 PS4 wasn’t a big deal. I started a day job again in the past year though, so my relationship with money became healthier. Instead of using my $2,000/day metric for making purchases, I think of my $13.50/hour at the liquor store. (And that’s really more like $12/hour since I bank my raise.) Now, I always consider my Income and the expected Outcome of my purchases. I’ll give you an example. I may be going a little overboard with quantifying unquantifiables, but bear with me.
Let’s take the $60 Trudeau sweater. I think it’s hilarious, but it’s still just an item of clothing. I wore it about 10 times in the past year. Every time I wore it, some stranger would make a remark about it and we’d banter on a bit, have a laugh, and go about our day. The sweater is also kind of a dated joke, so I expect that to happen less as time goes on. In three years, I’ll probably wear it 30 times. Since I’m calculating for $12/hour from the liquor store after banking my raise, the sweater is essentially costing me 5 Working Hours. Is wearing that sweater 30 times in three years worth 5 hours of stocking, mopping, and talking about wine? Well, I actually enjoy my day job, so I say yes. The answer would be vastly different if I hated that job, but the key thing to note is I’m comparing my Income to my purchase’s Outcome, and deciding whether it’s worth it or not. Even though the sweater ranks among my dumber purchases, I still think it was worth it!
What about a night of moderate drinking at the pub? I went out last night and blew $40 for four hours of drinking with friends. That’s about 3.3 Working Hours. Wait, 3.3 Working Hours for 4 Drinking Hours? That doesn’t seem worth it. Besides, I drink enough that alcohol isn’t the hilarious roller coaster it used to be, and it’s really just something to do while socializing. I could take the alcohol away and probably still have just as good a time! The Outcome wasn’t worth the Income I was putting into it! Well… fuck.
I encourage you to do this mental exercise every time you’re about to make an impulse purchase. Gonna buy a $500 Apple Watch? Is it worth how much you have to work for it? That’s for you to decide. Shelling out $60 for a fancy dinner? Is it worth 3 or 4 hours of Income? Is the Outcome – two hours of eating great food – worth it in your mind? Maybe you’re buying a BBQ. $400 of Income becomes an Outcome of countless summer days gathering with friends making perfect steak after perfect steak. Sounds good to me! Try to always consider your Income versus your expected Outcome with every major purchase. It’s the only intelligent way to spend money.
Hopefully, you’ll find yourself spending a lot less.