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Plan Well, Retire Well

Saving and investing your money
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How Much are You Willing to Spend for Time, Convenience, Taste, Etc.


In your daily life, what questions are you asked? I suppose philosophers ponder questions like, ""If a tree falls in a forest and no one is around to hear it, does it make a sound?" As a financial educator, I've been asked questions lately like:

  • Does a Subscription Box save people money?
  • Should I pay someone to mow my lawn or clean my house?
  • Can you actually save money by growing your own vegetables?

These might seem like totally unrelated questions but they actually all relate to, how much are we willing to pay for intangibles such as time, convenience, and other things we value?

Let's use subscription box services as an example. Did you know that you can sign-up to have just about anything, including beauty supplies, pet treats, gaming items, and boxers, delivered to your home on a regular (often monthly) basis? People like experimenting with and being surprised by the new products delivered; that's one appeal. Another appeal is that they save on shopping time and hassle. One person I've talked with has toothpaste and toothbrushes delivered quarterly so that she doesn't have to remember to buy these at our store in a timely manner. If you don't have to take the time to go out and buy something, and it's delivered to your door, how much do you think this is worth?

Many a person has looked at all the household chores that need to be done, and decided to pay someone else to do them. Does this cost money? Of course! Is it worth it? Well, each person needs to consider the opportunity cost of these services in order to decide. First, what do you give up doing because you have to spend time doing these chores? Second, what will you not be able to do or buy because you use your dollars to pay someone else for their work? When you've considered these answers, then you can decide if it's worth it to you.

Another way to evaluate the cost of a service or product is to calculate how many hours you need to work to pay for it. I find this is very helpful for youth who are trying to decide if they want to purchase a new game or concert ticket or other entertainment item. When you divide the cost by your hourly salary, and then realize you need to work a whole day, for example, to pay for an item, then it gives you a different perspective on it's worth.

I was involved in a lively debate the other day about the value of growing your own vegetables. I started out arguing that it really doesn't save money based on my personal experience of plants that died before they produced vegetables! But others argued that it can save money but perhaps requires some expertise (that I'm lacking). And, then there is the value of having tasty, healthy vegetables conveniently located in your own yard. It's tough to place a dollar value on concepts like pleasure, stress-relief (for those who enjoy time in their garden), and even health but these are all important variables when we decide how to spend our dollars. I'm intrigued by this question and don't feel like my recent conversation really answered this question for me. What do you think?

Sometimes spending decisions are as simple as comparing the prices at different stores, and then making a purchase. But many times we are faced with considering how we value time, convenience, and other intangible variables like taste, preferences, social costs, and much more when choosing how to manage our money. There are no easy answer to the question, "What's it worth?" but it can be fun to ponder and debate.



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