A New Car or Ten Thousand Lattes?

At Big Think, Dan Ariely discusses ways to think about money so you splurge less — like equating expensive wine with gallons of milk and making paying hurt a little more. Ariely’s advice could have been useful to some people in the Congo, who lament they didn’t see their Prada suits as houses for their families. (HT: Marginal Revolution) [%comments]

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  1. Erin says:

    I find it’s useful to think of items in terms of how many hours I’d have to work to purchase them.

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  2. Katie Cunningham says:

    Groceries.

    Groceries are my ruler, when it comes to purchases and measuring wastefulness. After enduring years when grocery money was earned by pinching pennies, searching couches, and waiting for deals, the idea of blowing what could pay for a week’s worth of groceries kills me.

    Daily latte? A month of that is a week’s worth of food. Eat out for lunch every day? Two weeks, if you go the fast food route, is one load of groceries. If you like to sit down and be served, it’s one week.

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  3. Earl says:

    I’ve been using a system I’ve called “The Currency of Pad Thai” in order to control my spending. As my main interest is travel, I now weigh every potential purchase against how many plates of my favorite pad thai in Bangkok that I could receive for the same amount of money. It’s completely changed my perspective and has allowed me to continue my nomadic lifestyle.

    http://www.WanderingEarl.com

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  4. Eric M. Jones says:

    For a long time I have used the currency of “fighter aircraft” to understand government spending. One F-22 Raptor is $300 million dollars. A cheapo F-16 is only $50 million–almost FREE!

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  5. Kenny MacCarthy says:

    He makes some interesting points, particularly re the “pain of paying”. We all seem to like putting it off as long as possible. Too bad we’ve developed such warped senses of value. Wonder how THAT all came about?

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  6. Charlie says:

    I hope he factors in the law of diminishing returns. When faced with a rainy commute to work, which would you rather have, a car or another 10,000 lattes?

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  7. Sam says:

    After four years of frugal spending in college, I’m now weening myself off of the habit of equating purchases to how many beers it would mean giving up.

    Unlike some of the situations above, this actually had more of an encouraging effect on my purchases–do I really care less about item x than I do about two beers on a Tuesday night? It’s obviously much easier to justify the sacrifice of a few drinks than it is for a load of groceries.

    I’d be pretty surprised if this doesn’t ring a bell across American campuses.

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  8. Matt says:

    I have a good friend who instead of saying something cost $20, says it costs 4 footlongs from Subway – her favorite lunch.

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