When Less is More: The Importance of Perceived Value
The things we buy have an absolute value — the price we pay for them — but they also possess relative perceived values. Not everything with the same price holds the same value to me. An $80 pair of work boots might be worth much more to me than an $80 sweater or an $80 meal in a restaurant.
And I can often (not always) derive more value from something cheap than from a more expensive equivalent. Our discussion about wine last week is a perfect example: a good $8 bottle of wine is more valuable to me than an excellent $80 bottle of wine. It's difficult for me to detect a $72 difference between two wines. I get good value for that first $8, but the excess is an exercise in diminishing returns. (Plus, a lifestyle of good $8 bottles of wine is sustainable; a lifestyle of excellent $80 bottles is not.)
A night at the opera
Here's an extended example. I enjoy live theater. On occasion, I pay to see a play or — more often — a musical.
A couple of years ago, Kris and I went to the opera for the first time. We dressed up, drove downtown, met friends at an expensive restaurant, and then joined the crowd for a performance of Mozart's Don Giovanni. The night cost us over $200. We had an okay time.
Last year, we did the same thing. We dressed up, drove downtown, met friends at an expensive restaurant, and then joined the crowd for a performance of Mozart's Die Zauberflöte (The Magic Flute). Again we spent over $200. Again we had an okay time.
We also attend many amateur theatrical performances. One of Kris' co-workers is in a community theater, and we've been to see two of his shows. It's not high art. The plays are cheesy, but they're fun. The total cost is about $12 per event: $5 each for admission plus $2 for popcorn. But our main source of live theater has been small-town high school productions. These are always inexpensive and usually, well, interesting.
Sky Masterson finds value in gambling.
Surprisingly, I have just as much fun watching the neighbor kid as Sky Masterson in Guys and Dolls as I do watching a professional as Don Giovanni. Yes, it's entertaining to be part of the whole opera-going experience: fancy restaurant, fancy clothes, fancy music. But it's just as entertaining, and far cheaper, for me to eat dinner at Dairy Queen and then to catch a high school performance of You Can't Take it With You or Oklahoma!
I'm not saying that a sixteen-year-old singing “I Cain't Say No” is the same as watching a professional belt out the Queen of the Night's “Der Hölle Rache” aria — few things can compare. What I'm saying is that for the cost in time and money, I get far greater value from attending community theater and watching the neighbor girl sing “I Cain't Say No”. (Note: video is not of actual neighbor!)
Making the most of perceived value
This notion of perceived value goes to the heart of how we use our money. When we spend on things that give us little or no value, we're wasting our income, our work, our energy. When we buy out of habit, when we spend compulsively, we obtain little in return for our efforts.
Over the past two years, I've worked hard to use my money in ways that bring me the most value. To that end I try to:
- Buy things I need — or truly want.
- Buy things I will use.
- Buy things that possess quality.
- Buy things used or on discount.
- Buy things I can afford.
Seeking value is a new way for me to shop. It's a conscious process. I'm more mindful of my choices. I buy less Stuff, but I'm happier with the purchases I do make. If I make decisions that reflect my values, and that bring me commensurate pleasure, my money has been put to good use.
I'm glad to have been to the opera twice, but we didn't return this year, and we don't have plans to go anytime soon. That $200 per trip? I'd rather save it for home repairs or a vacation or a new car. Or to go see 20 community theater performances. These will provide me with greater value for my dollar. (Your mileage may vary.)