Recently, I heard a popular money expert discuss the concept of “economic elasticity.” Although a quick google search revealed multiple definitions, what I heard on the radio described our tendency, as humans, to consider some items as worth less than others. For example, $10 for a shirt? Good deal. $10 for a soda? No, thank you!
One could make some sort of argument about value, here. A shirt made of cotton fibers and woven in the US, made in non-sweat shop conditions, would actually be a steal at $10. And a soda made for pennies would not be worth the value of $10.
But let’s take a more realistic comparison (I’ve yet to see a $10 soda, though the day will come, I’m sure). How about the cost of ye olde PF favorite, a latte? I’ll put the price at a conservative $3.75. I would pay that, for a coffee treat. But spend $3.75 for two organic apples. I hesitate. $3.75 means a different decision in different circumstances. The question is rarely, “Can I really afford it?” The question is, do I want to spend this amount of money on this particular item.
This is not inherently bad if we are being very, very mindful about each decision we make. However, if we act like an $800 TV is out of the question due to price, and then spend $100 dollars a week unmindfully for the next two months, we are not accurately capturing our financial situation, we’re just haphazardly spending on what we perceive to be good deals.
We are frugal, it’s true. But not as intensely so as some other couples. We spend for fun, at times, and that is what we’ve chose to do, even with student loans to pay back. As I increase my mindful spending, I hope not to cheat myself and my little family out of future gains by falling prey to economic elasticity and my willingness to invest, vs. my willingness to shop at Ann Taylor Loft, or take in a movie with my husband, or indulge in a more expensive happy hour.
Currently, I’m sitting on the sofa in some cool* new spandex leggings. They are stretchy and awesome and look like the sky, and I spent $16 on ’em. I already had some lounging around pants, but I wanted some stretchier ones. I paid a hot 16 dollars for the pleasure of full range of motion. Price elasticity as relates to pants elasticity=a good bargain, as defined by me.
What items are easy to spend on, and what are difficult?
*as defined by 14 year old self, and currently 34 year old self. Turns out we have a lot in common.