Sharing Daily Discoveries About Personal Finance And Business Topics

Aesthetic Based Spending

I was talking to an individual today about a person who was generating well over five figures a month in revenue for his business. The interesting thing is that at the end of the month he would often be in the red or basically just squeak by after operating expenses. This wasn’t exactly a low margin style of business like most retail stores as an example.

I was trying to find out more on why exactly that was the case as there must be some overspending somewhere to create that. Unfortunately, I wasn’t able to get exact details. I have heard of similar experiences before and the common theme I usually hear is that the person would base their expenses on what looks correct based on typical setups as oppose to focusing on what they need.

For example, I guess a typical business has say a fax machine and so a lot of people get one because it makes the environment feel more correct. There are people that still use it everyday, so it only makes sense right? Like with this example, there are actually a lot of alternatives such as simply sending and receiving faxes digitally. Save on the paper cost and having to have these large machines which can make sense for a lot of people.

I don’t really know a proper term for that and so I personally label that as aesthetic based spending as it is not so much that you need it, but rather it just makes things look better to you. Good for your eyes but bad for your wallet I guess you can say. Of course, unless this is like an interior design issue then that is a little different. Spend based on what you need is usually the way to go I’d say.

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