WHEN does something become cheap or expensive? When does a purchase become practical or impractical? Whether you have kids who you want to be educated consumers or you are on your quest to be a smart buyer, it takes some discernment to answer those questions.
What used to be a simple division between your needs and wants suddenly get complicated with judgment of long-term versus short-term investments, personal branding and business branding, or marketing yourself or your company through the things you possess.
Suddenly, what you used to consider as just a “want” in college, have become a “need” in your profession.
As stated in an article published by the International Journal of Public Sector Management, the concept of value for money in everyday life is easily understood: not paying more for a good or service than its quality or availability justify. In relation to public spending, it implies a concern with economy (cost minimization), efficiency (output maximization) and effectiveness (full attainment of the intended results).
In other words, a high-end basketball shoes like the Under Armour Curry 3 (costing around P7,000) or the Nike LeBron 14 (costing around P8,000 to P9,000) is a fitting pair if you’re a professional basketball player. Since you’ll be on your feet playing or practicing six to seven hours a day, it is absolutely necessary that your footwear provides proper cushioning, ankle support, and added movement leverage to avoid injuries.
Just like how businessmen capitalize in good people and efficient equipment to make their companies successful, so do athletes invest in their gears. This spending is justified and is therefore a good value for their money.
Wearing it to school just to play it cool and brag about it? Impractical and a definite insult to the life-purpose of the shoes, man!
Celebrities and models get sponsorship from makers of designer hand bags and shoes. They get paid for wearing a watch studded with diamonds encased in pure gold, ones we only see on ads. It’s reasonable for them, they’re in show business. Will it have the same value when you’re in an office facing the computer for eight hours, earning about only about 10 percent of what they make and with mortgages to pay? You decide.
Value for money does not depend on how small or big the price is. Some basic considerations safety and risks involved as well as its long-term use. Buying a pre-loved book may often be sensible but pre-loved appliances may pose some risk and hidden extra maintenance cost.
A second-hand car is a wise choice for a new graduate starting to drive who would certainly earn it added bumps and scratches. However, a family man with a more stable income may find it more practical to buy a brand-new vehicle (doesn’t necessarily have to be a luxury brand) that’s going to require lesser maintenance and risk to him and his family.
Other questions to ask to find out whether you’re getting your money’s worth are: Who are you at the point of your purchase? Can you afford it, or would you have to sell a kidney to pay for it? Are you still living within your means, emergency fund intact, savings secured? How are you going to use what you’re planning to buy? How often will it be used? For what purpose? Have you explored all the options? Will it increase your net worth? Or will it just increase the size of your ego?