Stop Splurging

Hello Aspiring Chillers,

I have several takes on how we all have too much stuff—so many takes, in fact, that I couldn't fit them into just one post. Therefore, this is the first of a three-part series in the coming weeks about how to clean up your personal finances by using impulse control!

Marketers and large companies want you to believe that buying or gifting the new thing will bring you happiness. I want to challenge that theory on a few fronts:

1. Most of us do not need more things. (Today)

2. Experiences are better than things. (Part 2)

3. People do not want the things you buy for them. (Part 3)

Need Fewer Things

Look around the room you are in. How many of the things in there do you use often? How many of them bring you joy when you use them or look at them? Assuming you are like me and realize that you do not need most of this stuff, you are going to be the easy ones to convince this is a good plan.

For the rest of you who are still skeptical, let's turn this into a personal finance discussion. For most of my adult life, I have employed a few rules that have helped me keep my finances and stuff in check.

1. Work-related upgrades: Will I earn more than it costs within a year? ROI! Do the math!

2. Not going to help you earn more money? Frequency of use…Once per week?

3. The 10% of things left for everyday use: What is the projected cost per use? Would I be willing to pay X to rent it each time? If yes, then buy.

4. I just want it…1-week note rule.

5. One Kryptonite…Only buy as a reward when you reach a goal or milestone.

Shout out to Maurice Moves for articulating this list better than I ever could. I have always used a similar set of rules in my daily life but had never written them down so matter-of-factly. After stumbling across his video recently, I finally had the ammunition to share these thoughts.

Will I Earn More Than It Costs Within a Year?

This one is pretty basic, but we need to calculate the Return on Investment (ROI) for something new or an upgrade. The key here is to actually do the math. If you are buying something for work or your business to help you make money, then we have to make sure the cost is worth it.

Frequency of Use?

Moving on from business-related expenses, is this thing going to be used at least once a week? This is generally for easing the annoyance to do something. An example I use here is a nice kitchen knife. If you cook a lot, then you know that there is nothing as useful as a good knife. This will make the whole experience of cooking easier and less time-consuming. We probably cook major meals 3 times a week in my household, so this easily falls into this category.

If you are going to use it less then it has to fit into another rule!

What is the Projected Cost Per Use?

The projected cost per use method is perfect for figuring out if something that gets little use is worth buying. These things are used much less frequently than once a week. One of my original examples of this was a nice pair of flip-flops. I think the pair I bought was like $60 or something along those lines like 8 years ago. When I had little money so this felt like a big purchase at the time.

I have lived in the Northern US for 98% of my life, so there are only about 6 months a year where it is viable to wear flip-flops and only 3-4 if you are less crazy than I. That said, I pretty much wear them every day I can, so I can wear through them pretty quick. Then I upgraded to this nice pair. They lasted 7 years; I finally had to get a new pair this summer.

Let’s assume I wear them 3 days per week just in the 3 summer months (4 weeks per month), which means they would get 36 uses per year, so they are used less than the once per week rule. I generally try to get things where the cost per use is a quarter ($0.25). In my mind, I would pretty much pay a quarter for anything, so it’s easily justifiable.

$60 / 7 years / 36 wears = $0.238

So if that was the case, it would cost me about 23 cents per wear if I bought this pair. Now this is a projection for a normal person. In reality, I wear them 6 days a week for 5-6 months of the year at a minimum, so it became very easy for me to justify buying the nice pair. My projected cost per use is just over $0.05, that is great value!

If you just use this rule and even relax it to $0.50 per use, you will most likely save money in the long run.

I Just Want It!

This one is for all the impulse buyers out there. Stop clicking 'buy now.' Instead, store the thing somewhere and then review it in a week. If you still need to have it, then you can buy it. Most of the time, you will have forgotten why you wanted it and removed the emotion they prey on to get you to buy stuff. I personally have a Notion page dedicated to this because I use that app all of the time. In the video, Maurice suggests taking a photo; if you regularly scroll through your own photos, this could be a good way to go about it.

I have to have it..no matter what

We all have something that is the one thing it is almost impossible to say no to. This is not impulse; it is something that you build a lot of your identity around. You are going to buy these things; it is just a matter of when, not if. I get it.

In these circumstances, make sure that the only time you buy these things is when you achieve something. They are now the reward for reaching milestones. Do yourself a favor and help set these milestones with someone else who does not completely understand your love for this particular thing. This will force you to set real goals that are far-reaching enough that when you do achieve it, you will have earned the reward.

Make sure to check in next week to get part two!