I remember how an old friend of mine once reserved a table from a bar for $300.
Nothing special about that bar or that table – he just wanted to have some fun for the night with his friends.
He was netting $12/hour at the time and wasn’t particularly enthusiastic about his job. (Now he’s unemployed)
My point is not to criticize his decisions how he spent his money, but rather put things in perspective:
When he is working, he is exchanging his time for money ($12/hour).
When he bought that table for one night, he exchanged 25 hours ($300/$12) of his life for that table.
Had he known that he’d have to work 25 hours to have that table for 4-6 hours for one night, would he have bought it?
He never just thought about it like that. In his mind, he didn’t exchange his precious time, but rather just numbers on his bank account.
This gets magnified when you truly hate your job and every hour that you spend working.
Every time you make a decision to spend your money you are exchanging hours, even days of doing something that you hate.
From my point of view, this would make every penny that I have extremely valuable.
This is one of the reasons why I think long and hard before I make a purchase, no matter what it is. I don’t hate my job, but I really appreciate the time that I have left and how I’m going to spend it.
Wait, there’s more (freedom opportunity cost)
Let’s assume that your living expenses total $40 a day and you have $1200 extra money saved in your bank account.
Excluding surprising expenses, you essentially have 30 days of freedom from work in your bank account.
These 30 days can be considered even more valuable if you don’t like your job. Less, if you do.
Now, let’s think about that $300 purchase once more.
We already concluded that you would be using 25 hours worth of work, but in addition you would also be exchanging 7 and half days (the exact number depends on your living expenses) of freedom to make that purchase.
When I’m walking in a store I don’t see just numbers that I have to spend from my account to buy something. I see numbers that determine the amount of sacrifice that I have to make to get that particular item.
There aren’t many things in the world that I would buy that I don’t need by exchanging potential freedom that exists by having money.