I returned to Paris last week and was lucky enough to catch up briefly with another American expat. He and I are about the same age and our backgrounds are similar, so conversation flowed easily.
One topic we discussed was inflation was inflation: how it impacts people in different ways, depending upon their age and buying habits, and how we mentally get stuck in a period of time or particular economic environment that locks us into a certain idea of what is a ‘fair price’ for things and what is (now) too expensive.
Let me clarify these two points: inflation impacts everyone, but it impacts ‘consumers’ more than it impacts Old Money Guys and Gals (OMGs). The general public who regularly spend money on non-essential items at the expense of savings and investment will of course get less for their money–more often–than OMGs who make wise purchases of essential items less often.
That’s the whole crux of The Old Money Book. It’s literally in the title: How to Live Better While Spending Less.
That’s the ‘lifestyle’ approach to lessening the impact of inflation on your weekly and monthly budget. It’s math: spend less, have more cash, become financially independent sooner.
The second part of our conversation was less cut and dry, more nostalgic and psychological. To the objective (and younger) observer, we may have sounded like The Muppet Show’s Statler and Waldorf grumbling from the balcony.
Our complaint–and subsequent confusion–arose from this observation: at what point does a person begin to think that something is ‘too expensive’?
Of course, this realization is based on the past price of a certain item. When you reach a certain age, as I have, you remember when a nice off-the-rack-suit was $250.00. Dress shirts and chinos hovered around thirty to fifty bucks a piece.
And of course, wages have increased over time to compensate, but the mental ceiling that has locked in my mind for the price something should cost has remained stubbornly in place. Why this is, I cannot say. My expat buddy shared the same gradual and random sticker shock–living in Paris will do that–but he couldn’t offer a rational explanation, either.
I recall a recent incident: I was searching online for a new pair of penny loafers. Allen Edmonds’ Newman model was available…for 485,00 euros.
I own numerous pairs of AE shoes. The quality is there. However, in my mind, a pair of penny loafers should cost no more that $250.00. Why I feel that way is a mystery, but the reality is that I will loiter with intent on the AE website and wait for said loafers to go on sale and only purchase them when they dip to what I consider to be a ‘fair price’.
My expat friend sports Hermes neckties, which is wife has dutifully bought for him over the decades. They are lovely, luxurious, and timeless. (He still has to wear a necktie frequently, given his profession and social calendar.)
As fate would have it, he recently discovered the current retail price of Hermes neckties, and all I can say is that, well, ignorance was bliss. He has now asked his wife to abandon their long-held birthday gift ritual. Instead, he trolls the resale shops in the 16th arrondissement on his own in search of pre-owned neckties at a price he can live with.
So…what’s wrong with us? And is it just us? Or do you have a product or service that you feel has just become ‘too expensive’ to justify?
Let me know. And let me know how you’ve dealt with it.
Thanks.
- BGT
I have an old story about this.
When I was a not-quite-so-little girl, my mother complained to me about a neighbor dressing her little girl for kindergarten in “$35 dresses” and how ridiculous she thought it was.
Looking back on this, I realize the issue was less the price than the practicality – this small child was very active and a bit messy, and frilly Easter dresses were probably not the right thing for fingerpainting or playing outside in on a daily basis. However, that $35 figure stuck in my head for many years.
It was difficult to convince myself to spend more than $35 on an “ordinary” item of clothing. Winter coats, interview suits, formalwear, perhaps things like hiking boots could be exceptions.
The result? Lots of not very good clothing that was bought secondhand or cheap and didn’t last.
Finally, one day, I sat down with an inflation calculator to see what $35 at the time that conversation was had would be after many years had gone by – at that point I think it was about $75. That helped as a starting point.
Then, in part because my daughter took an interest in these issues, I started learning about fast fashion and the damage it does, and started the shift to quality over quantity. I still wait for sales and look at secondhand sources, but now I’m less interested in the lowest possible price and more interested in a fair price that considers the value of the maker’s work while still being within my budget.
Price is what you pay.
Value is what you get.
If you are not getting any value out of something then the price you paid was too high. Simply put, it was too expensive.
Value can come in many forms. A pair of Allen Edmonds that work for their living tramping the pavements. Or perhaps a painting on a wall which provides endless pleasure.
If the shoes are in a cupboard and there is no continuing pleasure from that painting, then it was too expensive. You paid 100% more than you should have.
I hate to nitpick, but if you paid 100% more than you should have then you paid twice as much as you should have. If what you mean is that you should not have bought the item, then you paid an infinite percentage more than you should have because any number is an infinite percent increase from zero.
I’ve been working on over consumption recently. The question isn’t the value, or how much I paid, it’s how many do you actually need. But I do live in a hot climate so how many pairs of sandals could I need? It does turn out the answer is more than I thought. Habits and cognitive bias (the answer to your question of why) turn out to be harder to break than I thought.
Fixing things is too expensive now with the exception of cars. Let’s say a fridge stops working it will cost 120.00 just for someone to look at the appliance then the cost to repair is more than what a new one will cost. It’s even worse for the luxury brands. The approach I took was to buy a no thrills refrigerator that will cost nothing to repair. (Semi mechanical). When I was born my parents had an refrigerator call International Harvester and it lasted from when they were married in 1949 until 1974. Forget Televisions they are now throw away devices, I purchased the cheapest I could find and put a 5 year warranty on it. Also in my attic I have an old fashioned TV antenna which gives me an unfiltered digital signal so I can watch sports on the weekend. For Laptops I only purchase refurbished with more and more power in the cloud it makes no since to spend a fortune. As far as food just cook from scratch and you should be able to keep your grocery bill under control.
Hermes scarves have become outrageous, I now search for vintage/used ones. I buy a lot of my Brooks Brothers sweaters second hand as well. The quality in the vintage pieces is still there,not so much with the newer pieces. It just makes sense not to spend on something made in China when I can buy a slightly used piece made in Scotland, Italy, Germany or the UK and get much better quality.
“Too expensive” is all subjective. When I find something too expensive, I look at less costly alternatives and that helps me size things up. Should I buy a J.Press surcingle belt for $60 or a cheap faux leather belt at a local department store for $40? When viewed that way, the choice becomes obvious. Should I buy a $600 scarf or no scarf at all, is a much harder question to answer. It’s about one’s desire matching the cost, and weighing alternatives across the quality strata.
I recently wished to purchase some office supplies (3ring binders) to organize notes from some online classes I was taking. Have you seen the prices of office supplies? It’s worse than eggs were a few months ago. I just can’t justify it especially since it’s paper, chipboard, holding paper. I thought recycling was supposed to help prices. It’s as if the materials were harvested on a distant planet and shipped in from outerspace.