When is something too expensive?
My Dad and I had an interesting discussion the other evening. He currently has a standard definition TV and uses an antenna to receive local television broadcasts. With the upcoming requirement to go digital, he’s been trying to decide on what to do. His options are: purchasing a digital converter box, getting cable service, or satellite. He doesn’t want a satellite, but was considering going cable until I told him how much it cost.
He’s held off switching to cable for a long time, far longer than I thought he would. I asked him why, especially since his local service with antenna is not the greatest and he enjoys watching football games on the weekends and TV in the evening. His reply: It’s the principle. He just refuses to pay that much money for something. To him it just isn’t worth it.
When is something too expensive?
I thought about our conversation for a while afterward and it brings up a very interesting question: When is something too expensive? Of course there are the obvious answers: You literally don’t have the money or there’s no room in your budget to buy it without sacrificing something else that you need. But what if you do the money?
The decision really boils down to two things: Is it worth it? or What are you giving up or missing out on to get it?
Is it worth it?
This is probably the first decision process most go through. I go through this process frequently as I am sure many of you do. I enjoy talking on my cell phone to friends and family while driving back to the “big city” each week for my one day in the office. Having a blue tooth headset would be great, but given I only have couple more weeks of driving to do and given my speaker phone on my Blackberry works pretty well, I just can’t seem to justify spending the money.
The answer to this question is unique to each of us as it’s really based on our own internal guidelines about what is valuable and important. There are a few questions that should be considered by each of us though:
- How often will I use it? i.e. Am I really going to get my money’s worth from it?
- Do I want it or need it? Remember, a need is something you can’t do without.
- Why do I want it? Do I want it because it’s cool and everybody else has one?
- Did I consider the alternatives? Could I get an older model used? What other options do I have?
When considering purchasing something, taking a few minutes to ask the questions above and reflect on the answers should help you make a smart decision. If you still aren’t sure, wait 24 – 48 hours. If you still want to buy it after going through a 24-48 hour waiting period, than go get it.
What are you giving up or missing out on to get it?
This is what convinced by Dad to not get cable. He just can’t see dishing out $50 – $100 a month for television service. His argument? He could use that same money on an investment that instead of just burning $50-$100 a month would grow and provide a return on his money. I can’t argue with that.
Each time we make a purchase, we’re making a choice to not do something else with that money. We’re giving up something. Is what you are buying of greater value than the other things you could do with that money?
Like the previous question, the answer is very personal and there isn’t a right or wrong answer. To me, while I think cable is expensive, it’s worth it to me to pay for it. I like the channel selection and since I have a high definition TV I really enjoy the high quality of HD sports and shows. For my Dad, it’s just not worth it.
How do you determine if something is “too expensive”? What decision process do you use when making a purchase decision? Add a comment!
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