Diminishing Returns

I'm sitting at home watching an episode of True Life on MTV. This episode is profiling two young women who are addicted to shopping. As an organizing expert, I find it fascinating. I witness these girls indulging their addiction to acquiring new clothing, wigs and accessories while ignoring higher financial priorities such as rent and utility bills, I can't help but think about the cycle of money for a compulsive shopper and how it's always a losing proposition.

Let's do a little math, shall we? (and you KNOW how I feel about math...)

Let's take a look at the cycle of $100 spent on a pair of jeans.

First you earn the money. Depending on what you do for a living, that could mean an hour's work or two days work. Next, you exchange that hundred bucks for the jeans. Then you put them in your closet where they may or may not get worn for an unknown number of years. Flash forward to the end of the life of those jeans. If you wore those jeans a lot and you feel that you got your money's worth of value and enjoyment from them, that's great news and a good use of your money.

IF on the other hand, those jeans spent most of their life hanging quietly in your closet, that's where your financial loss is realized. You spent money on something you barely got any use from and when you and your jeans part ways, you can donate them and recoup nothing, consign them or sell them at a garage sale where you'll get about ten to twenty percent of what you paid for them. 

Over-spending on clothing is like pouring money into a magic shrinking machine. You put a hundred dollars in, you get ten dollars back out.  The next time you're tempted to spend money on something you don't really need, imagine selling it at a garage sale tomorrow for ten percent of what you paid and see if you still feel as passionately about buying it. 

 

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Comments

[Geralin Thomas]

Monica,

This is such a good topic ~ I can't wait to share this post with clients.

BTW, another show worth watching for over-spenders is Bank of Mom and Dad. The spending and debt are out of control while the professional advice is helpful.

[balunov6]

Good topic, useful discuss. Thanks for share your thoughts.