One of the questions that confronts many of us when we start thinking about money, and where to spend it, is what constitutes “value.” Many of us want to know that we are getting good value for our money, and that often means that we have to search to define what makes something “worth it.” As is common in the world of personal finance, though, what constitutes value is highly subjective.
Does Value = Cheap?
For many people, good value means getting something as cheaply as possible. This means that it’s all about the dollar amount. The bottom line. The idea is to pay as little as possible for whatever the item is. Some of the strategies that involve getting the “best value” when it comes to nothing but price include:
- Couponing (bonus points for extreme couponing)
- Shopping sales and stocking up
- Buying used whenever possible
- Growing food
- DIY projects
- Collecting freebies whenever available
These strategies can help you save more money, spending less on the things that you pay for. In the case of just getting the least expensive thing, quality is not always important. If those frozen meals are on sale, two for $1, you go for it — no matter the nutritional value of the food.
If your ultimate goal is to save as much as possible over time, pinching as many pennies as you can, this can provide you with the best value.
Does Value = Quality?
Since I’m not much of a penny pincher, I look st value more in terms of quality. I don’t mind paying for something that I think is better. I’d rather spend $100 on a pair of shoes that will last two years than $30 on a pair of shoes that will wear out and need to be replaced in eight months. Additionally, I’ve compared taste on some generic foods, and some of them really aren’t the same thing. I’ll pay a little more for something I think tastes better, or that has better nutritional content.
However, it’s important not to get caught up in the value trap that insists that just because something is more expensive, it must be better. This isn’t always the case. Sometimes something more expensive is just…more expensive. When you decide that you want to value something based on its quality, you really need to keep it’s actual quality in mind. You need to compare various degrees of quality in order to make your decision. And you need to have an idea of quality is for a particular item. If you can’t tell the difference between a mediocre bottle of wine and a good bottle of wine, there is no sense in paying extra for something you can’t detect quality differences in.
What’s Important to You?
Of course, in the end, value is all about what’s important to you. And it goes beyond the physical characteristics of price and quality. Value also depends on the importance you attach to something. Your perception matters when it comes to value. What you find of value might be completely different from what someone else thinks is valuable.
I think that I get better value for my living arrangements by living in a smaller home. Others, though, might value more space, or prefer the status that comes from living in a bigger home. Really, what you value makes a big difference in what you are willing to pay for something, as well as whether or not you think that something is a “good value.”
Look at what is important to you when determining something’s value. My “desk” is actually a cheap plastic table. I feel like it’s a good value, though, because it is the right height for me to type comfortably. An actual desk might be of a higher quality, and be considered an upgrade and a good value, but I’m not as comfortable with “real” desks. So, while upgrading to a new desk might be someone else’s preference, and provide a great value, it doesn’t seem like a good trade to me.
Think about what you want your life to look like, and how your spending decisions impact your lifestyle. Then, make decisions based on what is important to you, and what you think is a good value.
Photo by Redjar.