Just What I Wanted

Jonathan Clements · Dec 17, 2022 · 21 replies

Jonathan Clements | Dec 17, 2022

‘TIS THE SEASON WHEN many of us open our wallets and spend with reckless abandon. Along the way, we often end up buying a gift or two for that special person in our life—ourselves.

I don’t put too much stock in the accuracy of quick consumer surveys, but it seems the percentage of folks who self-gift might be 22% or 57% or even 77%. Whatever the right number is, I’m not inclined to be too judgmental, provided a reasonable amount of thought goes into the purchase. What do I mean by that? Here are six bad reasons to buy something:

To send a message. With our spending, we’re often purchasing a vision of ourselves that we want the rest of the world to buy into. The Honda Fit says we’re thrifty, the Jeep says we’re fun-loving, the Prius says we’re concerned about the environment and the Mercedes says we’re well-heeled.

While I find such signaling silly, I also realize it’s hard to separate signaling from carefully considered desire. Perhaps you really do love German engineering and you don’t give a hoot what the neighbors think of your BMW. But probably not.

To imitate others. There’s a reason marketers hire celebrities to endorse products. Clearly, it works. But to state the obvious, if you buy a celebrity-endorsed product, you don’t achieve celebrity status and, in fact, the celebrity may not even use the product. Meanwhile, who’s paying for that celebrity endorsement? If you buy the product or service, you’re footing part of the bill.

Because it’s on sale. This is a weakness of mine. I’m always drawn to products that are deeply discounted. Exhibit A: More than a decade ago, at an outlet shopping mall in Flemington, New Jersey, I bought a pair of black leather Cole Haan shoes that were on sale for $75, down from $300. Every time I wore the darn things, my feet would scream. Years later, after the pain of the foolish purchase had finally eased, I stuck the shoes in one of those charity bins at the local supermarket and bid them good riddance.

Because it’s supposedly in short supply. Remember March 2020, when panicked shoppers emptied grocery store shelves and created unnecessary shortages in key products, notably toilet paper? A few months later, I overheard a neighbor discussing the $1,000 of meat that she’d rushed to buy in the early days of the pandemic—and which she was now throwing out because her family hadn’t eaten it.

Retailers know that limited supply—real or not—can create a sense of urgency and get shoppers to pull the trigger. “Going out of business sale,” proclaims the sign in the window of a store that never seems to go out of business. “Only 2 left in stock—order soon,” announces the Amazon listing for a mug I was looking at, and which perhaps explains why I bought it.

To boost our spirits. After a rough day at the office, folks might seek solace at the mall on their commute home or do a little online shopping, sometimes spending money they can’t afford. Partly, it’s because a rough day can leave our willpower at a low ebb. But partly, it’s an attempt to cheer ourselves up. I have, alas, witnessed this phenomenon among people I’ve known. Trust me: Spending won’t cure unhappiness.

Because we think it’ll appreciate. Of course, some possessions do appreciate in value—classic cars, rare stamps, art—but the vast majority of our purchases will end up all but worthless.

So, why do folks persist in seeing more than fleeting value in the possessions they buy? I think it’s a holdover from the past, when families measured their wealth not just in land, but also in fine china, silverware and antique furniture.

If the six reasons above make for bad spending decisions, what makes a purchase a good one? Obviously, it should be something we can afford. Many of the best possessions, I believe, are those that turn into experiences and that are potentially shared with others—the supplies needed for our favorite hobby, the car for the cross-country trip, the tennis racquets for you and your spouse.

But much of the time, we won’t know whether we’ve made a good purchase until later, when we realize we have—or have not—received great pleasure for the dollars we spent. How can we tilt the odds in our favor? We’ll likely fare better if we avoid the mistakes listed above. We might also favor many small purchases over a few large ones, so an occasional bum expenditure isn’t so devastating. But as always with financial matters, perhaps the best strategy is to inject a healthy pause between when the desire to act hits us—and when we fork over our hard-earned dollars.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on Twitter @ClementsMoney and on Facebook, and check out his earlier articles.

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Just What I Wanted

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