January 23, 2007

little things add up

Yesterday, a friend of mine showed me two pictures of furniture she was interested in buying. One was for an entire set of bedroom furniture -- bed, dressers and all those other things -- and another was just for a bed. The prices for the sets of furniture were (hypothetically) 1.5x and 1x. She was wondering which one to buy, and I told her to go for the entire set for 1.5x.

This actually kind of stemmed from my decision a little less than a year ago to buy a couch for my new apartment for $1,600. At that time, I thought having a big comfy couch would be critical to my happiness. After all, I love to watch TV and I love to sit on big comfy couches. However, as time passed, I realized I probably could've gotten the same utility (love those economic terms) from an IKEA couch at 1/5 the cost.

Wait, you may say. Didn't I tell my friend to go for the more expensive option? Yes, I did. =) My rationale was that she was going to need to buy all of those pieces of furniture anyway so in the end, the 1.5x cost would be less than the total cost of the bed at 1x plus all those other pieces at .

So what does this have to do with personal finance? Well, duh! The motivation for spending less overall is so that you have more money to sock away in your savings! That was the driver behind my thinking. =)

By the way, this blog will be quiet most likely the next couple of days as I'm traveling to Clearwater for a client visit. Looking forward to the warmer weather!

No comments: