The last month I’ve been scrambling to pay off a rather pricey, yet expected expense. I pre-ordered an amazing set of Solid Snake statues made by First 4 Figures almost two years back, which turned out to be nearly $2000 and it finally arrived! The actual panic wasn’t really about me not having enough money, it was more about reshuffling my liquid stash to fully pay it off (without being forced to withdraw from my investments…More on that in a bit.). Well, that and my whole reserves is gone. It turned out to be some great streaming material too, as I decided to do an Unboxing Stream.
So why am I talking about expensive statues? Am I just flexing about how I can afford it? Not really. What I would like to say is: no matter how expensive an item is, don’t feel bad for buying it.
Life is too short to limit yourself to be like a monk.
But it is also too short to enslave yourself to the costly whims of pleasure and social expectations.
Changing the Mindset
I ask myself these questions whenever I am about to make a purchase:
- Can I afford it in liquid cash right now? (ie: I actually have the funds in my bank.)
- What can the item/service offer me in value?
- Will I be able to see a continuous return in value as time goes on?
In the words of Robert Kiyosaki, writer of Rich Dad, Poor Dad: “Questions open the mind. Statements close the mind.”
Asking these questions make you think. Saying that I can’t afford it makes me unable to think of ways to improve my current situation. Every single item you buy should always be a process of prioritization.
I always prioritize in making growth, whether in making me better a better person or making my finances bigger. After that, it’s about things that make my life easier which is a higher priority than my own enjoyment. I’m the kind of person who will find joy in min-maxing. That is, in layman’s terms, minimizing the amount of effort I put into to get a large amount of gains. I try to optimize everything that I do, whether it be finances, getting to work or even trying to maximize my build for PvP in Guild Wars 2. Lastly, if I buy this item, it should be able to provide me whatever function it is set to do for a long time. This is why I hate buying disposables, I end up throwing it out after I finish using them. (Food and gross things are exceptions.)
If any of the above three questions aren’t met, I usually don’t buy it. Unless I want to indulge myself sometimes. If you’re in the business of content creation, you have the nice bonus of indulging yourself and investing into your content stream! (At least in this niche anyway.)
Can I afford it?
Be honest with yourself. If the thing you’re buying means you need to pull the card out, stop and think.
Rule #1 of being financially smart: Pay yourself.
Rule #2 of being financially smart: Don’t make more debt if you have to.
If you know you can’t afford it now, don’t buy it! If you say you can pay it off later, especially if you put it on the card, that’s fine. Make sure you pay off the entire balance of the card before your next statement! This way you can get those sweet reward points and not owe the card company a single cent! This rule tends to go for most type of loans (with the exception of mortgages, but I won’t cover that here).
Interest rates are only getting higher, so be aware that paying minimum payments are not enough anymore! You have to tackle debt aggressively otherwise it will drain your funds even more.
Wait, why did we delve into rule #2 first before rule #1?
Aside from credit cards and debt draining your resources, one has to make a living and to invest and grow. I like to focus on keeping more money in your pocket, so that means I like reduce the amount of deductions pulling from my cash flow.
However, all of those deductions mean nothing if you actually have no money in your stash! Always stash away a bit of your cash from your paycheck every month. You can use that later, maybe for a purchase or better yet, an investment of some sort. Reaching FIRE is pretty easy, but you have to be really honest with yourself and be prepared to use a lot of self-discipline.
If you decided to use your money anyway (after determining that you won’t be in debt), let’s question the value.
What value do I see?
If I can increase my money stash, then I’ll do it in a heartbeat. This can range from:
- more cash flow (investments!)
- as a content creator: more content = more value
- increase skill set and knowledge through education
- increase influence = more potential customers
If it makes my life easier, or if it greatly entertains me, then I have to weigh out the pros and cons. This is entirely subjective and based on what your priorities and/or values are.
Let’s take a car for example:
- conveniently get around
- longer range
- carry more stuff
- look increasingly badass (depends on vehicle of choice)
- pollute the environment
- makes me lazy
- depreciates in value
- big freakin’ price tag!
- become a weapon of mass destruction for everyone around me and get jailed for it
- there are as many stupid drivers as there are stupid pedestrians/cyclists
- No, this is not Grand Theft Auto
Even after evaluating that I had more negative points than positive, I found that my most negative points still overpower the positive ones (after all, you can have less points but they strongly resonate with you!). With this in mind, I would not buy a car in the near future.
Use your best judgement here. There is no right or wrong answer, but you have to think really hard and be honest if you need it or not. Own up to your decision and proceed.
Can I keep on getting the value out of it?
If you can get more of the same wonderful thing, will you jump up and down for it? I know I would.
If I had to throw it out right after, I’d be a bit more hesitant to buy it. It feels like a waste.
It means I have to buy it again at the same price. That really bites; I would rather use it as much as I an before I have to dispose it.
Well, that’s not really true for games though. Video games nowadays tend to be varying about its quality whether if it’s in the story or in the gameplay. The amount of hours played don’t mean anything anymore; you can keep on playing a crappy game like it’s a terrible job. A really expensive Triple A title could perform abysmally in comparison to a $5 Indie Game (I’m looking at you Anthem…)
Caveat: These impulsive buys of questionable value can be indulged upon once in a while. It’s like getting coffee from Starbucks! It’s super expensive to get coffee there! If you can get the same value by doing something else (or buying something that can let you enjoy it at a lesser cost), like making your own coffee. Think about what you’re going to get and what your value would be.
Do my Snake statues fit the bill?
My wonderful Solid Snake statues are definitely a single purchase. They are definitely oversized and overpriced paperweights. However to me, I get a lot of entertainment and personal value for the inclusion of these awesome statues to my video game den.
Does it really fit my three question criteria? Definitely yes. It’s questionable in some places, but I really don’t have to justify the purchase to anyone, or really regret it.
Remember Rule #1 of being financially smart? I broke that. Sort of.
I paid myself already, as I have already set up automatic payments to my investments (this way, I don’t forget!). Ideally, I wanted to invest into myself more (like about 60% of my paycheck), but on that day when I pre-ordered it, I decided to splurge.
I reshuffled all of my funds to make sure I paid the card in full. I knew these things are a prime collectors’ item when I do decide to sell the statues, but really the real value is making it an amazing part of my video game den. The statues are so well made that I can continuously look at the statue and admire the high quality craftsmanship behind it.
A nice bonus is that it has provided some additional content for my streaming channel!
Check out the VOD on my channel on DLive! And if you need permission to not regret your purchases, you’re now armed with the knowledge. With that, I can safely order you to do so. Captain’s Orders. 😉