As a personal finance blogger who’s never set foot in an economics classroom, I’m pretty oblivious when it comes to the more academic side of spending. All I see are the spending habits of people around me, ranging from the soon-to-be early retirees to the people who still love shiny stuff. One night, our new roommate “M” was telling me about a new car he intended to buy, and he dropped a term I’d never heard of before.

“I’d drive it lots and get lots of satisfaction out of it, so it’s totally worth it for the utils,” he said.

“The yoo-what?”

“The utils!”

Confused, I plunked myself down in front of Google, typing in “yutil” like an idiot.

“Uh, ‘util’. Like ‘utility’, dude.”

I figured it out eventually. After some struggling, it led me to this:

“The util has no concrete numerical value like an inch or a centimeter. Instead, it’s an arbitrary and subjective – yet convenient – way to assign value to consumer choices and to measure the consumer utility of one choice against another.”

“Here’s an example. Assume you to the supermarket with \$100 to spend, along with a phantom 100 utils – representing 100% of the happiness you expect to garner from all the purchases you make. Two-thirds of your money is spent on necessities – bread, milk, produce and other food staples. Although 67% of the money budgeted for purchases is spent on necessities, the number of utils assigned to those purchases – arbitrarily and subjectively – may only be 40. The remaining 33% of your money is spent on chocolate, ice cream, frozen pizza, soda pop and other unnecessary items. But the utils assigned to these purchases total 60.”

I finally understood.

“Hunh, I should probably mention this on my blog,” I said.

“Do it.”

So here we are.

*****

I once tried to justify my PlayStation habit, and it went pretty terribly. At “\$7.50/man-hour” for entertainment that included paying for my roommates’ playtime, it was the worst investment I’d ever made. It was bad enough I was investing in screen time; I was blowing thousands on something that didn’t add concrete value to my life. This was – and I realize this now – an awful investment to buy a shitty amount of utils. I know this because it wasn’t even making me particularly happy. I was paying for bragging rights.

Compare that to now. My main hobby now is cooking, and I’m getting quite good at it. For the price of one fancy restaurant entrée, I can whip up dinner for four, and learn cooking skills that will serve me for a lifetime. \$30 spent at the grocery store results in a shitload of utils. It gives me pleasure and purpose, I get to entertain guests for a night, and I’m learning. But wait, here’s the real kicker…

Money invested is now my favourite source of utils.

Utils are about spending money to buy overall life satisfaction. Therefore, it’s worth thinking about every purchase in terms of how many utils it gives you. You buy a \$20 sweater you know you’re gonna wear 100 times, and that’s 20¢ per wear. Pretty decent. You pay \$200 for tickets to “The Book of Mormon” and you get two hours of entertainment that you can’t really access again. With my values, that’s a poor buy for utils. (It may be different for you if you love, lovelove musicals.) When I thought about this more, I realized “buying money” gave me more joy, security, freedom, peace of mind, value, and deep contentment than literally anything else. Pouring money into my TFSA every month is a delight. Investing it and watching it grow is far better. I used to buy video games to fill a virtual progress bar. Now, I choose better utils: I get them from money that will allow me to live the life I want, regardless of what happens in the future.

Investing money may not be your favourite source of utils though. All I ask is you think about the usage of the item you intend to buy. Will that impulse buy Pickle Rick hoodie be hilarious a year from now, or are you gonna wear it just 15 times? Is that beer you’re gonna chug in five minutes worth \$9.26? How many utils is an iPhone compared to a flip phone? How many utils is junk food compared to a simple, well-balanced lunch? Will you use that meat smoker weekly, or will it live in your storage room? Will an \$18,000 car really give you more utils than a \$6,000 car?

We all measure satisfaction differently, but the efficiency with which we use things can be objective. For me, I “buy” money and investments I can use forever. Embrace the util, even if it is a nebulous concept. Anything that gets you thinking about how you spend is good.

Will you use your new purchase enough? Will it make you happier than the money itself? Does it retain value? All this brings us back to the util. It helps you make better choices.

What thing, in your life, gives you the most utils? Tell us in the comments, and share us on Facebook.