Psychology Majors - insights into this financial behavior

[dex]

I think I have a weird financial behavior that I don't understand. Here it is:

I can go out tonight and spend $25 - 30 for dinner for myself without thinking about it. But, if I wanted to buy something "tangiable" or lasting like a pocket knife, compact disk, or cooking utensil I really over analyze do I really want it; is it worth it.

A small part is I don't like clutter. I don't deny myself anything. But I find it difficult understanding this behavior.

Also, do others have any spending quirks? Maybe I'll look good in comparison.

 

[Moemg]

I can make small purchases ( under $75.00 ) no problem .Anything over that I analyze to death before I make the plunge .

 

[yakers]

Another One

Maybe I can join the financial quirks club (FQC)? I will spend any large one time amount with due dilligence but if it involves a repeated charge, even something like $4 a month, I will study it and call & clarify. Drives the phone company nutz but I am more warry of recurring charges. Now I may spend more than a years worth ($4X12=$48) on a single meal and not worry about it.

OK, Two:

Also I hate paying the price for wine in restaurants but I'm not as concerned about the food. Maybe because I know I can find the same wine fo 50% or so at the local wine shop.

 

[Olav23]

I can go out tonight and spend $25 - 30 for dinner for myself without thinking about it. But, if I wanted to buy something "tangiable" or lasting like a pocket knife, compact disk, or cooking utensil I really over analyze do I really want it; is it worth it.

This is so hysterical to me, since I do the same exact thing! I live in NYC, so I will go out to a bar, get 3 drinks, and drop $35 without problem. Then, I will really want a new book or gadget, usually under $20 and labor to the point of excess. I'll use book price comparison websites, read all the reviews on amazon, and drive myself insane comparing every feature and shipping price from different sites.

I think the term is "penny wise, pound foolish". That is so funny that I'm not alone in this madness

 

[audreyh1]

I hate paying daily entrance fees for state parks or other "nature" type spots. If I think I will go there more than once or twice, I usually pay the annual membership fee even if it's 5x the daily entrance fee.

Audrey

 

[Moemg]

. Then, I will really want a new book or gadget, usually under $20 and labor to the point of excess. I'll use book price comparison websites, read all the reviews on amazon, and drive myself insane comparing every feature and shipping price from different sites.

I used to also do this with books but now I buy as many as I want and resell them on amazon .

 

[SamHouston]

This is so hysterical to me, since I do the same exact thing! I live in NYC, so I will go out to a bar, get 3 drinks, and drop $35 without problem. Then, I will really want a new book or gadget, usually under $20 and labor to the point of excess. I'll use book price comparison websites, read all the reviews on amazon, and drive myself insane comparing every feature and shipping price from different sites.

I think the term is "penny wise, pound foolish". That is so funny that I'm not alone in this madness

That's kind of a nice problem to have, in a way. Next time you want a new book or other little gadget, just make an effort to skip one of those meals or bar tabs and buy the book or gadget guilt free. You can feel good about your effort to save money that way and still have something in hand to show for your efforts...at least that's the way it works with me.

 

[bssc]

Yes, it is psychology. I think that this was posted in "Other" but people tend to think of money in buckets.

The example that was given is:

Case 1 - You buy a ticket to a show for $20 and lose the ticket.

Case 2 - You lose the $20 before you buy the ticket.

Rational economic behavior tells us that the two items are equivalent but in reality, since the $20 ticket is more tangible, people are less likely to say that they will buy a second ticket. At least that is how I remember it. DW is the same way, she will hesitate to buy a pair of shorts that she will keep for years but not have any problems paying for a meal at the same price.

IMHO, it seems to more tangible the purchase is, the more likely we frugal people will hesitate to buy it.

 

[Nords]

A small part is I don't like clutter.

With me that's a big part of spending. I also don't like people bringing stuff home with them that'll inevitably become my job to maintain.

I enjoy browsing home-improvement stores and buying the supplies for our projects. However I don't seem to get the same response from actually doing the projects-- I'm currently backed up about three or four projects and yet we're still buying.

 

[GatorBuzz]

I enjoy browsing home-improvement stores and buying the supplies for our projects. However I don't seem to get the same response from actually doing the projects-- I'm currently backed up about three or four projects and yet we're still buying.

God, do I know how that feels. I've got half of my new windows installed, the other half in the laundry room; base boards and window/door casing done, but the crown molding is laying on the kitchen floor; I've got lumber for the deck out in the pole barn waiting to built.

As for the OP, I'm the same way. We will go out to dinner and spend 50-60 bucks and think nothing of it, or I'll be that much in groceries for a cookout for my family and friends. But I will wear out my keyboard researching any other tangible good that costs the same amount.

 

[Hillbilly]

I think I have a weird financial behavior that I don't understand. Here it is:

I can go out tonight and spend $25 - 30 for dinner for myself without thinking about it. But, if I wanted to buy something "tangiable" or lasting like a pocket knife, compact disk, or cooking utensil I really over analyze do I really want it; is it worth it.

A small part is I don't like clutter. I don't deny myself anything. But I find it difficult understanding this behavior.

Also, do others have any spending quirks? Maybe I'll look good in comparison.

Dex: Unlike you, I deny myself. I get great pleasure in watching others enjoy things rather than myself. But I shall not buy myself anything special...but I've had my eye on a new Vette as the DW wife knows is my greatest threat to my RE....until then I be in my '94 Toyota pickup getting 30+ MPG smiling all the way to the bank. DW will probably get a new Jeep to replace her '01 model long before I do anything for myself...just not in me I guess.

 

[Khan]

Poverty mentality : clothes, phone, kitchen stuff, sheets, towels

No problem: hardware and software upgrades, DSL, cable, quality food

I have no problem spending $10K - $15K on a new car in the next year, but don't want to spend $300 to $400 on an A/C

I'm paying people to do yard work and house work
(that's 'cause I am terrible lazy)

 

[dandetour]

I have been lurking here, learning and appreciating.
But I was moved to register just to participate in this thread.

I share the same behavior, the exact same. I am not a
psych appreciating kinda guy. But I do totally understand
this behavior.

Dropping $100 on drinks and dinner is joy. It is living the
high-life. Living well.

Looking for the $10 bargain best-bargain on the new gadget.
That is sport. That is not being the one guy that didn't
get the best price.

Or at least that is what lets me sleep at night.

Dan

 

[redduck]

Just the opposite for me. I don't understand spending large bucks on drinks/dinner. I'd rather buy $100 pair of Nikes that I can wear for at least a year or two (but, not every day).

 

[BunsGettingFirm]

I think the behavior applies to all experience goods, not just food and drinks. The older I get, the less I want material goods. Yes, I appreciate a fine car, but before I buy the car, I remind myself what a pain the ass it will be to have to watch where I drive it and park it. A car is supposed to take me from point A to B, not point B - 0.2 because I can't park it at the destination.

The experiences I get from experience goods can't be replaced. There is only a small intersecting point in which I have the time, will, interest, and friends to experience certain things. I recall all the bike rides across the mountains across Colorado, Nevada, and California (no, not all at once). To replicate those experiences now would be difficult. First, I'd have to stop lifting weights, ride 11,000 miles a year, and then move back across the continent. It probably won't happen.

 

[kaudrey]

Dex - I don't think that's weird. I'm the same way. BunsGettingFirm described it well for me - I like spending money on experiences, not things.

I'll go out for dinner/drinks with no problem, but I use the library instead of Amazon, and I buy most of my casual clothes (and often work clothes) on Ebay or in consignment shops instead of in department/chain stores.

 

[Spanky]

I think I have a weird financial behavior that I don't understand. Here it is:

I can go out tonight and spend $25 - 30 for dinner for myself without thinking about it. But, if I wanted to buy something "tangiable" or lasting like a pocket knife, compact disk, or cooking utensil I really over analyze do I really want it; is it worth it.

A small part is I don't like clutter. I don't deny myself anything. But I find it difficult understanding this behavior.

Also, do others have any spending quirks? Maybe I'll look good in comparison.

My DW is the opposite. She rather spends money on tangibles. That explains why we have so much stuffs in the house. I rather spend money on travel, movies and eating out.

 

[dex]

Wow, I'm surprised at the number of replies and that I'm not all that weird when it comes to this particular spending behavior. Maybe it is part of what allowed me to RE.

It also sound as if this behavior deserves a name of some sort. I don't know if it should be classified as a phobia or an ability.

This is so hysterical to me, since I do the same exact thing! I live in NYC, so I will go out to a bar, get 3 drinks, and drop $35 without problem. Then, I will really want a new book or gadget, usually under $20 and labor to the point of excess. I'll use book price comparison websites, read all the reviews on amazon, and drive myself insane comparing every feature and shipping price from different sites.

I think the term is "penny wise, pound foolish". That is so funny that I'm not alone in this madness

Olav - I am from NYC also but, it doesn't appear this behavior is limited NYC.

I hate paying daily entrance fees for state parks or other "nature" type spots. If I think I will go there more than once or twice, I usually pay the annual membership fee even if it's 5x the daily entrance fee.
Audrey

Audry, I do the same and I think I usually end up paying more over the year than if I didn't buy the annual membership.

Dex: Unlike you, I deny myself. I get great pleasure in watching others enjoy things rather than myself. But I shall not buy myself anything special...but I've had my eye on a new Vette as the DW wife knows is my greatest threat to my RE....until then I be in my '94 Toyota pickup getting 30+ MPG smiling all the way to the bank. DW will probably get a new Jeep to replace her '01 model long before I do anything for myself...just not in me I guess.

Hillbilly, some of the greatest philanthopist had your same behavior. However, as you say you deny yourself you may want to try this idea. Give yourself a monthly budget of money that you MUST spend every month on yourself. If you don't part or all of it. Do something with it that would make you unhappy; like giving it to a selfish deadbeat relative that spends all their money and doesn't have any savings.

I have been lurking here, learning and appreciating.
But I was moved to register just to participate in this thread.
I share the same behavior, the exact same. I am not a
psych appreciating kinda guy. But I do totally understand
this behavior.
Dropping $100 on drinks and dinner is joy. It is living the
high-life. Living well.
Looking for the $10 bargain best-bargain on the new gadget.
That is sport. That is not being the one guy that didn't
get the best price.
Or at least that is what lets me sleep at night.
Dan

Dan _ Welcome, I'm honored that I could get you out of lurking mode.
And I think you hit on part of the answer. Dinner is a joy and usually an unique experience whereas a tangiable item can be gotten anywhere so it is a sport to get the best price.

I think the behavior applies to all experience goods, not just food and drinks. The older I get, the less I want material goods. Yes, I appreciate a fine car, but before I buy the car, I remind myself what a pain the ass it will be to have to watch where I drive it and park it. A car is supposed to take me from point A to B, not point B - 0.2 because I can't park it at the destination.

The experiences I get from experience goods can't be replaced. There is only a small intersecting point in which I have the time, will, interest, and friends to experience certain things. I recall all the bike rides across the mountains across Colorado, Nevada, and California (no, not all at once). To replicate those experiences now would be difficult. First, I'd have to stop lifting weights, ride 11,000 miles a year, and then move back across the continent. It probably won't happen.

Buns, I think you got the other half of the answer - that it is more important to have life experiences than experiences with material thing.

So... Summing up.. I (we) can spend money (relatively) easily on (intangible) experiences rather than tangible items since experiences are more important than things. I (we) debate the need for and search for the best price for tangible items because the emotional connection and reward from tangible items is low. Therefor, paying the least for the best possible quality is the rewarding experience for me (you).

Sound good? I think we need a club and a positive sounding name for this behavior. It could blossom into a great movement.

 

[FinanceDude]

....until then I be in my '94 Toyota pickup getting 30+ MPG smiling all the way to the bank.

Wow!! What kind of Toyota pickup gets 30 MPG? I want one........

 

[audreyh1]

I too am willing to spend a lot more on experiences than things. It's definitely the experiences that matter most to us.

But that's also because I have learned how "things" can own you too - take up space, require maintenance, etc. So we focus on keeping the minimum of "things" necessary for our good quality of life. We put a lot of effort into getting rid of most of our clutter, so we tend to be very reluctant to accumulate stuff.

Still, certain "things" are very important to our life - like computers and camera equipment. And we are always willing to spend on the better quality and upgrade to the newer stuff after 2 or 3 years.

But we're pretty brutal about NOT accumulating things that are not top priority - this keeps the total cost down, as well as the clutter.

Audrey

 

[lazygood4nothinbum]

i relate to a lot of this. sometimes i have to buy a car & clothing, but primarily i don't like buying optional things that require storage or maintenance. if i buy, say, an object d'art to place on the shelf, i don't just have to dust the object, but i have to remove and replace it each time just to dust the shelf. it's too much work.

if a friend drags me into a store i approach the experience more like an anthropologist than a consumer or like a consumer who has stopped in a museum for the day. you don't bring home the stuff from the museum and i don't bring home the stuff from the store.

as to eating compared to purchasing non-digestibles, i am more likely to buy whatever i want at a supermarket where i can put the food away until tomorrow than i am to go out to a restaurant, but also i am more likely to go to a restaurant to eat what they serve today than i am to buy a nondigestible item that will be useable six months from today. that could just be my lazy not worrying about the maintenance on today's meal.

 

[megacorp-firee]

I agree with the 100 bucks for dinner and drinks is 'living the high life'... enjoying yourself... treating or rewarding yourself ...

On the other hand, earlier in life I was a 'heat seeker'. I bought the newest things on the market ... top shelf... ahhh youth.
...examples:
I had one of the 1st 8 track stereo's home and in the car
I had quadraphonic system ... with 2 records that I could find recorded in quad ... (4 big pioneer speakers too)
I DID NOT get a betamax though got lucky on that one VHS
I quickly learned that I did not like having obsolete things...
so for the next 30 years I wait until something is about to get to the next generation before I get one ...
I got an mp3 player (how many out there with digetal tape?), but not quite there to HD TV yet .

but the real truth is is that I am cheap ... LBYM is what I live by.

 

[MooreBonds]

Dex: Unlike you, I deny myself. I get great pleasure in watching others enjoy things rather than myself. But I shall not buy myself anything special...but I've had my eye on a new Vette as the DW wife knows is my greatest threat to my RE....until then I be in my '94 Toyota pickup getting 30+ MPG smiling all the way to the bank. DW will probably get a new Jeep to replace her '01 model long before I do anything for myself...just not in me I guess.

LOL...I'm definitely in the same 'denying myself' camp, Hillbilly. Sure does make the stash grow faster, though.

Of course, when I do finally FIRE, I will enjoy a few things with my hard-earned/saved dollars: mainly traveling, and cooking at home.

 

[Fireup2020]

Dan's philospohy rules!! (ok, I'm with Dex in his paraphrase ) Basically we are all here because we are all cheap in the way that works for us!

Welcome Dan!

 

[chinaco]

Same thing with vacations. No problem spending several thousand + on a week vacation for 2 (with very little analysis other than let's go there)... But I spent weeks considering the cost/feature differential between a couple of laptop computers that ranged in cost from $600 - $800.

There is something about spending on discretionary (fun items) that opens the wallet and shuts the cost conscious brain down... Vacations, restaurants, entertainment, etc... all seem to fall in this category.

But tangible discretionary items get the same scrutiny as buying something like a lawnmower. the cost benefit is scrutinized much closer.