The word expensive is an adjective describing something that costs a lot of money. What does it mean by “costs a lot of money?” I believe the word expensive is relative. Because our perception of what is expensive and what is not expensive will change depending on things that we have.
Why expensive is relative
When I first purchased my first DSLR package, a Canon XSi camera with the 18-55 IS kit lens, I thought the package was ridiculously expensive. At $949 plus taxes, it was the most amount of money I had ever spent on a hobby. For someone who had just graduated from university not too long ago, I questioned myself whether I made the right choice.
The Canon XSi DSLR camera and the 18-55 IS kit lens were considered as beginner hobbyist camera gear. Out of curiosity, I decided to check out other pro-consumer DSLR cameras and high end lenses. I was completely sticker shocked – many cameras cost more than $1,500 and many lenses cost more than $2,000! To me, I couldn’t imagine myself forking out that much money for a piece of equipment.
A few years after my initial purchase, I decided to purchase the Canon 17-40 lens. At $950 Canadian brand new and about $700 Canadian used, the lens was super expensive in my mind. At that time I was getting serious with photography. I felt that the kit lens was limiting my ability to take great pictures. After many weeks of consideration, I decided to bite the bullet and purchased a used Canon 17-40 lens at $580 US ($663.46 CAN). At the time I thought I was out of my mind to spend close to $700 buckaroos on a camera lens.
Soon my perception of “expensive” camera gear changed. Pro lenses costing $2,000 no longer felt ridiculously expensive to me; lenses costing $400 were considered as cheap. Today, after many purchases of higher end camera gear, my perception when it comes to expensive camera gear has completely changed. As scary as it sounds, I no longer consider the Canon 5Diii camera or the Canon 70-200 lens as expensive.
Funny how my perception has changed.
The never-ending slippery slope
As you can see from my example above, the word expensive is relative. If you own a Ferrari, your view of expensive car probably isn’t the same as someone that owns a 15 year old car. Similarly, if you own an iPhone 6S plus, your idea of an expensive smartphone probably isn’t the same as someone that owns a 10 year old Nokia dumb phone.
The scary thing about expensive being relative is that your view can change over time. Once you get a small taste of more luxury goods, you begin to desire more. Pretty soon, expensive items are the norm to you. It’s a never-ending slippery slope once you start this process.
What can you do to avoid this never-ending slippery slope?
- Look at your needs versus your wants: Always evaluate your purchases and see whether they are under the wants or needs category. If you need a new car, do you need a Ferrari or can you live with a Honda Civic?
- Have a budget: Know how much money you need for necessities and set a spending limit on your wants. It doesn’t do you any good if you buy a Ferrari but you can’t afford the gas.
- Quality over price: Just because something costs more, it doesn’t mean it has superior quality than a cheaper item. For example, Mrs. T once got a haircut for $50 at a hair salon but she was not happy with it at all. She now goes to a hair dresser school for her haircut for $15 and she is always happy with the end result.
Always keep in mind what you define as expensive and cheap. Your perception of expensive is relative. Just because something is considered as cheap to you, it does not mean it is actually cheap. Always consider possible alternatives, evaluate your needs vs. wants, and go with a quality items. Price does not mean everything.
36 thoughts on “Why your perception of expensive is relative”
You made a lot of good points, Taw. Perception of expensive is relative indeed. That’s why it’s really worth it to assess a product or service and categorize it whether it’s a need or want. I think one can help us to stay positive and maintain our current view on perception of expensive is have a frugal life and simple needs in life. It can save us from spending too much on some expensive items.
It’s very important to determine needs vs wants. Makes purchasing decision much easier I’ve found.
Ah, therein lies the rub. What’s a need for one person is a want for another. If more needs slowly become optional wants, we are on our way to both FI and life contentment. Good post Tawcan.
Thanks for your kind words. 🙂
Good point that it is somewhat relative and subject to personal views. But I cannot help but also look at the absolute value in respect to our FI income/current income and savings.
Looking at the absolute value in respect to FI income/current income and savings is a good way to keep motivated. 🙂
The same is true for wine, especially red, and single malt scotch. In both cases I probably still have a cheap to moderate taste and I have no plan to become too sophisticated for fear of jeopardizing the FIRE plan.
For cameras I have already succumbed to the lure of Canon L-lenses and the 5D body (though “only” the Mark ii). Love the 17-40mm lens, which was my first expensive lens too.
Good thing I’m not a big wine drinker. I bought a black label Johnnie Walker like 6+ years ago, there’s still half a bottle left. Maybe if I keep it long enough it’ll turn into a blue label? Ha!
On camera gear, I can tell the difference between pictures taken with an L lens vs. ones that weren’t. To me L lenses are that much better and worth it.
I like your focus on expensive vs. cheap and how our you look at quality instead. I’ve bought expensive and cheap clothes that haven’t really lasted. When I buy quality clothes, I know they will last – but I also make sure those kinds of clothes are things I need too. I see your comment about not having buyer’s remorse much either – that means you are making good decisions too!
Good point on quality clothes that last a long time. Whenever I have to purchase a piece of clothing, I would check out how durable the material is. If it’s thin cotton, I would stay away as the clothing probably won’t last too long.
“Price is what you pay, value is what you get” – Dividends Down Under. Or maybe it was someone else 🙂
Very good point Tawcan, it’s easy to get sucked into that frame of mind. I think if you have a true-love hobby then it’s okay to spend more on that. I don’t really have anything like that at the moment, though I’m sure I will at some point.
Whenever I think of relative value, I always think of water. Water in most cities is virtually free out of the tap, yet to a billionaire who’s stranded in a desert, he would pay many millions for just 1 bottle to survive.
Haha great quote, I should start quoting you. 😉
Love the post. Getting a taste of the luxury can be very, very dangerous for the reasons you pointed out. However, that doesn’t mean spending money is a bad thing. Researching, finding ways to raise the money, etc. can allow you to purchase the luxury item that makes you happy at the affordable price. Liking an expensive habit shouldn’t be a bad thing and the point of saving money is to spend it on what makes you happy. Your point of needs versus wants sums it up. If you open the hose and spray money on every hobby, you are screwed. But if you love cars, photography, sporting events, movies, or whatever makes you happy, finding a way to frugally enjoy an expensive hobby is the way to go. Why would you want to pick up a hobby and use a use a POS camera haha Go out and get you the equipment you need haha
Thanks for the great post.
You’ve raised good points on what you should do prior to purchasing the item. You need to find the right balance between saving money and spending money.
The idea of buying it for life has a certain appeal, too. Buying one quality item is often less expensive than buying several cheaper models. Of course, this can also be twisted to justify buying a pricey item (“It’s the last one I’ll ever need!”)
We try to keep track of purchases, big or small, in our budgets. This way, we can look back and see how much we’re spending on travel, gifts, etc. and see how many of those “one time” purchases really were one time.
Buying one quality item that would last a long time (or forever) is a good idea. A good example is the watch I wear everyday. It cost a few hundred dollar but I have been wearing it for over 15 years.
The trick is to determine whether the “expensive quality” item will last a long time or not. Probably doesn’t make sense to buy an expensive car and expecting it to last a life time. 🙂
This all makes a lot of sense, but I wonder if it’s possible to go back down that ‘expensive’ slope in the other direction once you’ve played at those expensive levels.
Once you’ve driven a ferrari, would you ever be satisfied with a toyota? Same thing with expensive cameras. Can you be happy with less?
I think it’s possible, but rare. There’s usually some prestige involved in high-end products that feeds the ego.
Wow great question Mr. Tako!
For me, I would be happy with less, as long as cheaper items can do what I need for my photography side business and various photography projects I have. Same thing with cars.
But it’s true, often once you get something more expensive it’s difficult to go with something less and still be happy with the decision.
I don’t make many large purchases, but when I want something, I seem to want it right away. This leads to buyer remorse. Now what I do if I want something is I sit on the idea for a few weeks. If the urge is still strong, I look for used equivalents. If the urge is lessening, I skip the purchase. Great photos by the way :-).
I tend to look at purchases in terms of life energy. How much life energy (work) will it cost me to make the purchase. Thinking this way helps me to avoid purchasing unnecessary wants. When i do need something I always buy quality and tend not to overly worry about price.
That’s what I do too Mike. Correlate how many hours I need to work to purchase this item. If an item is $20, I’d figure out the pre-tax equivalent cost and calculate the number of hours needed.
I tend to think and analyze a lot whenever I make a large purchase. I rarely have buyer’s remorse.
Noooooo!!!!! Not the hedonic treadmill!
For my photography hobby, I’ve actually “downgraded” from a bulky Nikon DSLR system to Oly micro 4/3rds system, with lenses and camera bodies roughly 1/3rd the size. As long as I’m shooting with prime lenses, I’ve been quite happy with the change. I still have a hard time justifying more than a few hundred dollars for a lense. A macro lens could be in my future, though.
I’ve considered downgrading my camera gear but the micro 4/3rds system doesn’t quite get it done for my photography business.
I can understand that. I’ve never done any professional work; but for my amateur eye, I am happy with the results from the Olympus M43 system. And it’s a lot easier to take my gear with me on a hike. Two bodies, 3 lenses, and a few gadgets in one little messenger bag.
Don’t get me wrong, I really like how pictures turn out on many 4/3rd cameras. Unfortunately these cameras don’t suite what I do. 🙂
The lighter weight and size are certainly nice. It gets heavy carrying a 5D with hand grip + a 70-200 lens.
Whenever I’m about to make a big purchase I imagine the product or service I’m considering to buy, and beside it I imagine a pile of money of equivalent price. Then I ask myself which of the two options would I prefer to take. If I want the money more then that means I shouldn’t buy the product or service.
Haha that’s a good way to think about your big purchases. Do you imagine a pile of money in paper bills or in pennies? 😀
Bills, lol. 😉
But you can swim in pennies. 😉
I agree, not only is it relative, but how it can change and evolve. I find myself not doing as thorough of an analysis on buying big items that I once did (in terms of quality and alternatives, etc). I remind myself occasionally that I need to still be diligent, etc, because things can snowball otherwise. But on the other hand, as I’ve gotten older and built more of a net worth, I catch myself thinking how a purchase is less material to my financial condition and rationalize some purchases.
It’s a balance and that balance will different for each individual. As your net worth grow, some purchases may not seem as expensive compared to purchasing 10-15 years ago when you have much less.
“Always consider possible alternatives, evaluate your needs vs. wants, and go with a quality items.” This definitely requires taking a step back and really thinking through purchases (no impulse buys)! I’m glad did this over the weekend, as I considered a $3000 purchase that would have been on a whim (and at the time, I knew it was a whim, so knew I needed to wait). So glad I considered the alternatives and examined my needs vs. wants – I still have my $3000.
That’s great that you considered your $3000 purchase and decided to go against it. I do the needs vs. wants evaluation all the time myself.
This is a good point to remember. I have recently found this to be true among my friends with regards to housing costs. Once you get used to paying $X per month, it doesn’t seem that bad to pay a little bit more. Seems to be another form of lifestyle inflation that we all need to guard against.
Good point, once you are used to paying $x per month, $x+1 doesn’t seem that much more anymore.