The Spending Divide

Although I myself have almost fully converted to an extremely frugal state of spending, I am puzzled why there is such a difference in spending habit with those around me.

As I mentioned before, I bought expensive jeans once upon a time and have finally realized that buying the expensive pair meant nothing to me. Now I opt for about $15-18 (usd) jeans instead. Sure I would like to have the expensive ones but I am not willing to spend the money to trade for it. You see, the money costs me a finite amount of my time which equates to a finite amount of my LIFE.

A lot of people vicariously spend without care. There is a very ingrained physiology involved that I've been trying to get to the root of. For example, I know buying a new car depreciates greatly off the lot. The value evaporates like puddles of water off a cast iron skillet. So, rather than buying new, you buy used and you skip all the depreciation. Even if you use the car in both cases til end of life, it serves you better to use the used car to end of life as that gives a much better value.

Although I would like a new car one day, I equate that  to essentially burning cash. If I had so much money that I would not blink an eye to really burn cash, then perhaps I would consider getting a new car. And yet, said person was told all these point of views and reasoning but still adamantly chooses to buy a new car. The quoted rebuttal being "I like it". My mind was boggled.

Now, I understand the allure of a new car fully. You can see it from the new state and you would know everything that happens to it. But the price is hefty enough that giving up that new car smell is certainly worth the $10k reduction in price by buying one that is 1-4 years old.

So can we chalk this up to difference of opinion? Do people just inherently prefer new goods? New anything is great of course but I think the point is to realize the amount of money spent is really not just using what you saved up but rather using units of your life that you traded for these money 'credits'. If it takes you 1000 hours at $10 an hour to make that $10k in price difference, will you readily spend it?

Does it take the realization that the $10k costs 1000 hours of work. In order to generate that 1000 hour of work, you actually had to commute, eat, sleep to produce those 1000 hours of work. If you add up the days you spent creating those 1000 hours of work, you'll realize it actually takes 6 months of your life to make this $10k. In other words, assuming a 80 year lifespan, you spent
0.6% of your LIFE that you will NEVER get back. (Not everyone makes $10/hour, if you make $60/hour then it costs you 0.1% of your life)

With that, you can only spend 0.6% of your life 133 times in your lifetime before you lay on your death bed. At which point you spent your life spending your life away by trading your most valuable commodity for mere things.

I hope at this point you will agree with me that the next time you spend $10k on anything that is completely discretionary and if looked carefully could be superfluous, you would say "Hell no, I'm not spending my life to buy that".