cost of item vs hours worked for it

maxie014

This fella also used to take the sheets of toilet roll home as well for the family to use!

I have no debt myself,in my early 50s,and people my age never used credit when i was younger,but some of the people i know now are ticked up to the eyeballs,even debt consolidation.
Anything they wanted they had to have,i cant beleive how daft some people are with money,but all they say is they enjoyed spending it at the time?

Eco_Miser

maxie014 wrote: »

I have no debt myself,in my early 50s,and people my age never used credit when i was younger

Really?
No HP, no catalogues, no provi cheques.
I never used any of them, but I saw plenty of ads, and use by others.

maxie014

Eco_Miser wrote: »

Really?
No HP, no catalogues, no provi cheques.
I never used any of them, but I saw plenty of ads, and use by others.

Nothing at the moment.
Ive had a mortgage,one loan about 25 years ago,a few interest free credit items at times,everything else is paid with cash.
Id probably have had more cash in the bank though if id kept it and used loans etc,or would i?
I always used to wonder where i was going wrong as everyone else i knew on similar money had flash cars,plenty money to spend,i didnt realise a lot of them used credit as i didnt myself?

talexuser

Eco_Miser wrote: »

If you go round a stately home, you'll see furniture much older than that, still in use.

Wasn't it Kenneth Clark (ex MP and all round sh*t according to most who knew him) who looked down his nose at Micheal Heseltine as "The type of person who had to buy his own furniture..."?

bigadaj

talexuser wrote: »

Wasn't it Kenneth Clark (ex MP and all round sh*t according to most who knew him) who looked down his nose at Micheal Heseltine as "The type of person who had to buy his own furniture..."?

I think that must have been Alan Clark. He would also have looked down at Ken Clarke as all kens money came from his missus, at least initially before he got the tobacco company directorships and the like.

N1AK

joeblags wrote: »

does any body else think this way? I find now I save a lot more buy thinking , hang on, this item costs £ 15. that's one hours wage for 1 item I don't even really need. might not seem a massive deal over 1 item but when I apply it to everything I look at buying it saves me hundreds a year

Yes. I use a similar rule of thumb: £60 is about how much we need to save to both be able to retire, on a good income, a day earlier. It helps discourage purchases, but might actually be too effective because I don't want to retire massively early and this is encouraging me to save money I arguably don't need.

Justifying £5k a year to lease a new car vs ~£1,500 a year for a newish used car is hard to justify when the difference is working an extra two months of my life for each year I'd have the car.

bowlhead99

N1AK wrote: »

Yes. I use a similar rule of thumb: £60 is about how much we need to save to both be able to retire, on a good income, a day earlier. It helps discourage purchases, but might actually be too effective because I don't want to retire massively early and this is encouraging me to save money I arguably don't need.

Justifying £5k a year to lease a new car vs ~£1,500 a year for a newish used car is hard to justify when the difference is working an extra two months of my life for each year I'd have the car.

There's lots of ways to look at it, most people (at least those on MSE!) are going to make some kind of comparison between what they are getting, and what they have had to do to get the money, or what they could have instead now or in the future - e.g. another item or service for them or their family or their heirs, or an event such as holiday or early retirement.

In other words, what is the 'opportunity cost' of having something instead of not having it -and the answer isn't always best seen in terms of pounds and pence then and there. Money is a way of keeping score, but to many it makes sense to count in "potential days off retirement" rather than how many other things you could buy instead right then.

I agree to much focus on one thing isn't necessarily useful. If you always compare buying a car to [buying a cheaper car and buying X other items plus a holiday] you may never 'think outside the box' and realise you could have cut short your working life instead of having more toys.

And likewise, in your case, if you always focus on building up a retirement pot you might end up with too much retirement pot and a bunch of money sitting there allowing you to retire at 60 instead of 70... then when you get there you're actually happy to work to 62 and you really wish you'd had some little luxuries or experiences to fondly look back on instead.

As a 'for example', say I'm considering a £20k second-hand car instead of a £10k one. There are all sorts of other things I could buy with the incremental £10k. I could buy the nicer car, I could buy something else, or I could invest it.

If I invest it at inflation-plus-3.5% for two decades, the incremental £10k will turn into £20k in real terms. So, by driving a grotty car now and foregoing the nice one to invest the cash, then at age 60 when I'm looking to buy another second-hand car, I could get a *really* nice (£30k) one to see me into retirement instead of a grotty £10k one at that point.

Will I value the potential upgrade of grotty car to a "really nice" car at age 60 over the immediate upgrade of grotty car to a "regular nice" one at age 40? Would I prefer neither, and just retire at 59 instead? The answer is different for everyone.

But the question, or the thought process to answer it, is perhaps less different. Basically, some mixture of what does this item cost, how hard did I have to work to get it, and what could I have instead, now or later. We all go through that process although some will do it at a faster or slower pace than others and have less of an open mind because they already know how they like to think.

Personally I never really worry about how much effort it took to get the £10 (or £10k) of cash. What's done is done and I can't give back the £10 or £10k and get back all my expended effort.

So my consideration is always what else will the £10 or £10k get me, now or in future, or if I spend it on this thing, how much effort or sacrifice will it take me to get my *next* £10 or £10k to replace it.

talexuser

bigadaj wrote: »

I think that must have been Alan Clark.

Of course it was, , Kenneth, his dad was lord Clark of civilisation, from whom he presumably inherited the castle.

Eco_Miser

maxie014 wrote: »

Nothing at the moment.
...

I always used to wonder where i was going wrong as everyone else i knew on similar money had flash cars,plenty money to spend,i didnt realise a lot of them used credit as i didnt myself?

I was asking about the other people as you said

maxie014 wrote: »

people my age never used credit when i was younger

which was somewhat incredible, because credit has always been around, just the form it takes has changed.

badger09

colsten wrote: »

Surely, if it's your main account, collecting the £4 isn't a 'chase'? £4 x 12 = 48, a couple of decent bottles of champagne for Xmas or your birthday?

colsten, I know you are right:o

When I say 'main account' I mean the one into which my pensions are paid. The only regular outgoing is a monthly standing order to our joint account for household expenses. The rest is of course moved out immediately to wherever it works best for me:D

However, you've shamed me into it so after lunch I'll read the full T&C and the threads about the efficacy of 4 DDs to my usual source accounts:cool:

PS a couple of weeks late for my birthday, but extra bubbly at Christmas, or on my next visit to my son in Hong Kong:T :beer: