Spending It

Triumph13

On the general issue of allowing yourself to spend, assuming you are in the fortunate position to be struggling to spend rather than struggling to get by, what really works for me is calculating a daily budget.  Take your annual budget and divide it by 365.  Any day where spending adds up to less than that, you can afford without having to think about it.  There will almost certainly be enough days where you spend less than budget to cover your bigger expenditures.  It makes it much easier to not sweat the small stuff.  I still couldn't pay £5 for a pint of ice cream though

zagfles

BikingBud said:

Fairness might apply is sports or playing games but surely the criteria here is value for money.

Do I consider the cost presents value.

I do not waste money but if the quality is increased by an uplift in price then is it worth it to me?

Meat pies are to my mind the best example.

A cheap pie has little meat. What there is will likely be the cheap cuts and poor tasteless gravy, that's why it is only a few quid but I am still dissatisfied and will not buy again

Buy a more expensive pie with more, better quality of meat and tasty gravy then the satisfaction rate will be higher and I would buy again.

I might try the pie with the gold leaf on the crust out of curiosity but might find the meat and taste is no better and I am being charged too much for the novelty. So generally will go back to meaty tasty pie. 

Across all consumer expenditure I will apply the same, I know what my daily allowable expenditure is but I won't blow it on something that add little satisfaction and therefore is poor value.

At some point when I decide to disappear on my bike for a few months, living within the daily budget might pay for that posh hotel for a few days vice the roadside camping. When I need a shower and proper bed that will be very good value.

Yup - there's clearly some products where paying more gets you a commensurate increase in quality, but a lot of the time the price uplift vastly exceeds the quality uplift. IIRC some university did a study where they reckoned on average a 50% increase in price gets you a 10% increase in quality.

Obviously there are many exceptions and even stuff where the cheaper item might be better. The problem is a lot of people actually believe the old maxims like "buy cheap buy twice" or "you get what you pay for". But anyone who uses MSE knows they're myths!

zagfles

Nebulous2 said:

Secret2ndAccount said:

Nebulous2 said:

... I can't bring myself to fly business class. ...
The economy return flights were around £1300 each, and business class was over £5000. Another £7000! ...

I generally agree. I have a fairness doctrine, hence my comment about refusing to pay £5 for Ben & Jerry's. You will notice in my comment, I referred to slightly nicer airline seats.
From my limited research, in a £5 pot of B&J, the CARDBOARD POT costs 15p, and the ice-cream less than 50p. The mark-up is huge.  When I apply the same math to long haul flights, yes of course there is a large mark-up on Biz class, but it's not actually fair to look at it as a multiple of cattle class. They make a loss on cattle class. If a plane flew (long haul) with economy full, and the front empty, they would not make any money. So, whilst the Biz seats are too expensive, the Econ seats are too cheap. It's not totally fair to build your view of what it should cost from the price of the cheapest seat.  If we all made a stand, and everybody refused to pay the price in Biz, they would have to start charging more for Econ. The rich are subsidising the poor.
So whilst I do baulk at the price of flat seats in Biz, I'm not saying I would never pay it. My fairness doctrine would permit it.

In some ways I think you've just made it worse for me. The very rich people, or the people who actually are in business class, for business use, is one thing, but the people where business class is a bit of a stretch that have convinced themselves its worth it, or they need it, to then be paying to subsidise the rest of us in the cheap seats is even worse. 

That's where the high multiple comes from, its a snob tax. 

I've got this cultural thing, which as I implied may be part of my upbringing, about hardship having some value. Enduring something for 24 hours, doesn't seem like a big deal. 

Another way of looking at it is what else I could do with that money. I could get 5-6 weeks touring Europe, on what I had saved by not going business class. So 6 weeks of lovely French / Spanish food and wine versus 48 hours of slightly more discomfort on a plane. 

If "endurance" is being sat in a comfy seat being served complimentary food and drink, watching films, playing games, getting up for a quick stroll/stretch every so often, then we don't know we're born    But I have to admit 24 hours is pushing it for me, I want the real luxury of a bed in a private room to sleep in these days. But I really wish I could do 24 hours to Aus with nothing booked, find a cheap hostel after landing and sleep like a log in a dorm. Those were the days. 

Linton

zagfles said:

BikingBud said:

Fairness might apply is sports or playing games but surely the criteria here is value for money.

Do I consider the cost presents value.

I do not waste money but if the quality is increased by an uplift in price then is it worth it to me?

Meat pies are to my mind the best example.

A cheap pie has little meat. What there is will likely be the cheap cuts and poor tasteless gravy, that's why it is only a few quid but I am still dissatisfied and will not buy again

Buy a more expensive pie with more, better quality of meat and tasty gravy then the satisfaction rate will be higher and I would buy again.

I might try the pie with the gold leaf on the crust out of curiosity but might find the meat and taste is no better and I am being charged too much for the novelty. So generally will go back to meaty tasty pie. 

Across all consumer expenditure I will apply the same, I know what my daily allowable expenditure is but I won't blow it on something that add little satisfaction and therefore is poor value.

At some point when I decide to disappear on my bike for a few months, living within the daily budget might pay for that posh hotel for a few days vice the roadside camping. When I need a shower and proper bed that will be very good value.

Yup - there's clearly some products where paying more gets you a commensurate increase in quality, but a lot of the time the price uplift vastly exceeds the quality uplift. IIRC some university did a study where they reckoned on average a 50% increase in price gets you a 10% increase in quality.

Obviously there are many exceptions and even stuff where the cheaper item might be better. The problem is a lot of people actually believe the old maxims like "buy cheap buy twice" or "you get what you pay for". But anyone who uses MSE knows they're myths!

How do you value "quality"? What does "a 10% increase in quality" mean?  Everyone will have their own valuations.  If you measure wine by ml alcohol/£ then it makes sense to go fo the cheapest bottle you can find. On the other hand you may find that a £20 bottle of wine is immeasurably superior to a £6 one, which you would not drink even if it was free.

What I find is that one becomes used to a standard of living over the decades at work and this naturally continues at much the same level during retirement.  With increasing unused wealth price has become a decreasing factor for me, I just buy what I want and dont allocate a budget for day to day expenses

Though for some inexplicable reason I do spend more time worrying about whether to buy a cheap bottle of say tomato sauce or go for something that could be better at twice the price than I do about the relative costs of holidays where minimising discomfort and maximising the experience are the over-riding factors.

Moonwolf

zagfles said:

BikingBud said:

Fairness might apply is sports or playing games but surely the criteria here is value for money.

Do I consider the cost presents value.

I do not waste money but if the quality is increased by an uplift in price then is it worth it to me?

Meat pies are to my mind the best example.

A cheap pie has little meat. What there is will likely be the cheap cuts and poor tasteless gravy, that's why it is only a few quid but I am still dissatisfied and will not buy again

Buy a more expensive pie with more, better quality of meat and tasty gravy then the satisfaction rate will be higher and I would buy again.

I might try the pie with the gold leaf on the crust out of curiosity but might find the meat and taste is no better and I am being charged too much for the novelty. So generally will go back to meaty tasty pie. 

Across all consumer expenditure I will apply the same, I know what my daily allowable expenditure is but I won't blow it on something that add little satisfaction and therefore is poor value.

At some point when I decide to disappear on my bike for a few months, living within the daily budget might pay for that posh hotel for a few days vice the roadside camping. When I need a shower and proper bed that will be very good value.

Yup - there's clearly some products where paying more gets you a commensurate increase in quality, but a lot of the time the price uplift vastly exceeds the quality uplift. IIRC some university did a study where they reckoned on average a 50% increase in price gets you a 10% increase in quality.

Obviously there are many exceptions and even stuff where the cheaper item might be better. The problem is a lot of people actually believe the old maxims like "buy cheap buy twice" or "you get what you pay for". But anyone who uses MSE knows they're myths!

I’d be interested to see that study as I wonder what a 10% increase in quality means as price is easier to measure than quality.

A measurable 10% reduction in low light noise on a phone camera might equate to a much higher satisfaction with the final photos, and if there are lots of 10% improvements across the camera including noise, reduced colour fringing, reduced vignette, better colour balance then I might be enough happier with the resulting photos that a 50% higher price is worth it to me.

In fact, I would argue that is what this thread is about, if you are not going to run out of money then getting into the mindset that you can pay 50% for that extra quality because you will get pleasure from it, why not. I’d rather have a few extra happy memories than die with an extra £100k in the bank. I’m going to  buy a slightly more expensive wine as I think it tastes better, even if some scientist tells me most people can’t tell the difference.

Obviously, I’m still going to try and get the best bangs for my buck across all my spending, I might still need to decide if it is the more expensive wine or the camera that gives me most happiness.

Albermarle

Linton said:

zagfles said:

BikingBud said:

Fairness might apply is sports or playing games but surely the criteria here is value for money.

Do I consider the cost presents value.

I do not waste money but if the quality is increased by an uplift in price then is it worth it to me?

Meat pies are to my mind the best example.

A cheap pie has little meat. What there is will likely be the cheap cuts and poor tasteless gravy, that's why it is only a few quid but I am still dissatisfied and will not buy again

Buy a more expensive pie with more, better quality of meat and tasty gravy then the satisfaction rate will be higher and I would buy again.

I might try the pie with the gold leaf on the crust out of curiosity but might find the meat and taste is no better and I am being charged too much for the novelty. So generally will go back to meaty tasty pie. 

Across all consumer expenditure I will apply the same, I know what my daily allowable expenditure is but I won't blow it on something that add little satisfaction and therefore is poor value.

At some point when I decide to disappear on my bike for a few months, living within the daily budget might pay for that posh hotel for a few days vice the roadside camping. When I need a shower and proper bed that will be very good value.

Yup - there's clearly some products where paying more gets you a commensurate increase in quality, but a lot of the time the price uplift vastly exceeds the quality uplift. IIRC some university did a study where they reckoned on average a 50% increase in price gets you a 10% increase in quality.

Obviously there are many exceptions and even stuff where the cheaper item might be better. The problem is a lot of people actually believe the old maxims like "buy cheap buy twice" or "you get what you pay for". But anyone who uses MSE knows they're myths!

How do you value "quality"? What does "a 10% increase in quality" mean?  Everyone will have their own valuations.  If you measure wine by ml alcohol/£ then it makes sense to go fo the cheapest bottle you can find. On the other hand you may find that a £20 bottle of wine is immeasurably superior to a £6 one, which you would not drink even if it was free.

What I find is that one becomes used to a standard of living over the decades at work and this naturally continues at much the same level during retirement.  With increasing unused wealth price has become a decreasing factor for me, I just buy what I want and dont allocate a budget for day to day expenses

Though for some inexplicable reason I do spend more time worrying about whether to buy a cheap bottle of say tomato sauce or go for something that could be better at twice the price than I do about the relative costs of holidays where minimising discomfort and maximising the experience are the over-riding factors.

Or down on your hands and knees at the supermarket to see on the bottom shelf how much something per 100g is, compared to something else. Then an hour later worrying about how much inheritance tax I might have to pay.
Not rational, but old habits die hard !

michaels

In terms of quality measurement perhaps it is a product that costs 10% more to manufacture is sold for 50% more. However if the slightly better parts mean it lasts twice as long or works twice as fast then why not?

I do think in the UK we have too many people who don't check the price or simply equate more expensive with better especially with cheaper products hence the rip off Britain consequences.

Nebulous2

There's an issue about decreasing benefits from much larger sums of money at play for me. I'm a bit out of touch with bike wheels, but the desire is to get something light and strong. A saying with cyclists about wheels used to be. "Price, weight, strength, pick any two." 

As I say I'm a bit out of touch but the price points used to run a bit like this:- A pair of wheels at 2.2kg £120.  Just under 2kg, £200. Just under 1600g £350 Just under 1400g £750. Just under 1200g £2000. 

The just under bit was very important. A set of wheels at 1588g would sell where a set at 1620g wouldn't.

I have bought a set with aero spokes at 1560g  for £400 or so. I couldn't bring myself to move to the next increment because of the big jump in price it involved. 

Everyone will find their own level along that continuum and the price point which represents best value in their own head. It is individual, a bit like the what is your number thread. 

Things have changed since then, new materials, move to disc brakes, wider rims and wider tyres. I've spent more than that since on a hand-built set for long distance use, with a hub dynamo, so I know I'm not covering all the bases for cyclists, but hopefully you get the point anyway. 

bjorn_toby_wilde

Nebulous2 said:

There's an issue about decreasing benefits from much larger sums of money at play for me. I'm a bit out of touch with bike wheels, but the desire is to get something light and strong. A saying with cyclists about wheels used to be. "Price, weight, strength, pick any two." 

As I say I'm a bit out of touch but the price points used to run a bit like this:- A pair of wheels at 2.2kg £120.  Just under 2kg, £200. Just under 1600g £350 Just under 1400g £750. Just under 1200g £2000. 

The just under bit was very important. A set of wheels at 1588g would sell where a set at 1620g wouldn't.

I have bought a set with aero spokes at 1560g  for £400 or so. I couldn't bring myself to move to the next increment because of the big jump in price it involved. 

Everyone will find their own level along that continuum and the price point which represents best value in their own head. It is individual, a bit like the what is your number thread. 

Things have changed since then, new materials, move to disc brakes, wider rims and wider tyres. I've spent more than that since on a hand-built set for long distance use, with a hub dynamo, so I know I'm not covering all the bases for cyclists, but hopefully you get the point anyway. 

I think you make the point when it comes to value and as a cyclist I make the same choice myself. 200g of weight saved won’t make me faster.  Only new legs will do that 😉

@Moonwolf uses a wine analogy which I like too. I’d rather pay for the £20 bottle any day but to take that analogy a step further, I had a meal in L’escargot on Greek St not long ago and their wine list had bottles for four figure sums. I’m never likely to find out but I really doubt I would taste enough difference between those and say the £50 bottles to make the added expense worthwhile.

Secret2ndAccount

Nebulous2 said:

As I say I'm a bit out of touch but the price points used to run a bit like this:- A pair of wheels at 2.2kg £120.  Just under 2kg, £200. Just under 1600g £350 Just under 1400g £750. Just under 1200g £2000. 

Same thing for car wheels, but multiply all numbers by 10...

To a large extent, the price/quality curve is irrelevant.  If the product that is 10% better costs twice as much, you have two choices: pay it, or go without.