I was looking through an issue of Smart Money this weekend and my eyes were arrested by an article that was describing water that retails for $2600 … yes, that’s right … $2600. I spent a couple of minutes looking for a decimal point between those numerals, but no it is really two thousand six hundred dollars for a 750ml bottle of water!!
The creator himself admits that the water in the bottle comes from Tennessee and the same company that sells him the water, sells their water to other companies that then bottle and sell the water for $2.50. So what’s so special about this bottle? According to its creator Kevin Boyd, it is encrusted in 10,000 hand placed Swarovski crystals, so he is not selling water, he is selling a “lifestyle”. I was further surprised when I googled this product and found out that there was more than 1 one of these bottles sold!
That got me thinking along the general lines of Conscious spending vs wasteful spending. What I mean by that is that I can never conscionably purchase water that costs more than $2 (except when I’m in desperately thirsty at Universal Studios and I can’t get a 750ml bottle for < $5!), but at the same time, both DH and I are gadget freaks and believe that a computer for serious works must absolutely have at least a 27″ monitor (preferably two), which for many people will seem ridiculous. So while there are some things that cannot be justified as anything but wasteful, the line is much grayer in many cases. How do you determine whether something you are going to buy is a wasteful splurge or something that while seemingly extravagant can actually be useful in the long run? Here’s a list of mental checksteps I go through every time I feel like splurging:
- Do I need it?
- As mundane as this sounds, a lot of splurges fall by the wayside when this question is answered truthfully.
- If it is more of a want, will it give me sufficient pleasure over a long period of time to justify its cost?
- Can I afford it?
- Be truthful to yourself.
- Can I use it many times, making the price per use relatively low?
- Sometimes the item costs a lot up front but can be used forever making it a worthwhile product over the long run.
- Can I substitute/borrow?
- This is a great way to get items that you won’t need regularly. Asking this question before I buy not only saves me money but it also saves me the storage space.
- What will I do with it when I no longer need it?
- This is a question DH and I think of more and more these days. We finally got tired of all the clutter in the house. So we went through all the stuff we owned and anything that hadn’t been used in a year was tossed out. Anything used within the past year was analyzed more carefully to see if it remained. We suddenly realized how much more room we had! So now, for every purchase we make we think about the storage implications as well. If you are environmentally conscious, you have to take this into consideration when you buy an item.
- Is this the best price for this purchase?
- Do I need this now or can I wait?
- Sometimes waiting a little while and looking for deals allows you to get significant discounts. It all comes down to blunting that impulse to splurge right now.
- What would you do with the money if you don’t get this item?
- This is called, in economic speak, opportunity cost. What else can you do with this money? Pay down another month’s mortage and save interest? Go on that vacation you’ve been dreaming off? You get the idea.
Answering the questions above should give you a very solid answer to whether the item you are considering is useful or wasteful. I am not against splurging every now and then. All I am saying is that, having a sparkly bottle of water for 5 mins may not justify the 5 months of effort it took to allow you to have that bottle. What do you splurge on? What are your strategies to prevent wasteful spending?
Photo Credit : bbaunach