While having a discussion with a friend today about some new smartphones that are coming out I was saying how I was planning to buy a phone that will cost about $500 outright which will be a lot cheaper if I was to sign up for a contract with various carriers. He was then expressing how I should get the upcoming iPhone 6s and that since I was going to spend $500 an extra $300 is very little difference to get what he felt was going to be a superior product.
Now of course mathematically that makes no sense as an extra $300 is like 60% more money. By most people’s standards that is spending a ton more money. However, I understood his mindset that many of us share where if we are spending so much on an item as is that you may as well go all out. Example, for a lot of people if they were going to spend $15,000 on a TV set then spending an extra $3000 to get the absolute superior hardware would seem to make a lot of sense. Of course that number varies depending on the product as you would more likely be sensitive with that figure for a car as an example.
It’s a dangerous factor financially in many ways if you constantly convince yourself that you may as well buy the best. For myself, what helps a lot is that my personal point of where I would throw frugality out the window is if I can see how spending a lot more will translate to better returns financially. Example, the speed of the product will be so good that I can do more work which brings in a lot more money. Many times items would fail this kind of test where it’s more about the novelty of having an expensive item and so I don’t succumb to the marketing hype.