Thursday, September 11, 2008

The Best Money I Ever Spent

We all do dumb things with money. In his book, Personal Finance for Dummies, Eric Tyson writes about a fellow who went into a convenience store, laid a $20 bill on the counter and asked the clerk for change. When she opened the register, he told her it was a stick-up and demanded all the money in the register which she then handed over to him. It was $10. The thief then grabbed the $10 and ran out the store leaving the $20 bill behind on the counter. Hopefully we’ve also done some pretty smart things with our money. At a conference I attended a few years ago, the speaker challenged us to think about how we have used our money. She gave us an index card and asked us to make two lists. On the left, we were to write three or more of our best uses of money and on the right three of the worst uses. She then collected the cards, shuffled them, handed one back to each person in the audience, and asked us to tell her what was on the card we received. When thinking about some of my worst uses, I had no problem. There were several things I could put on the list. Among them, one of the first cars I bought, some expensive pots and pans I didn’t really need, and clothing I ended up not wearing. But when it came to the best uses, I could think of several possibilities, but nothing in particular stood out as “best.” Because the time we were allotted to make our list was running out, I wrote the first thing that was on my mind. It was an item I bought as a teenager for my grandmother. I was on a trip with my family and we stopped at Wall Drug Store in Wall South Dakota. Wall Drug Store sold every conceivable type of souvenir. Looking over it all, I spotted something I thought my grandmother might like. It was a small white plastic urn with some plastic violets in it and was 39 cents. When I returned home and gave it to her, she graciously showed her appreciation of the gift and of my thinking of her. It was also when I learned she was dying of cancer. She died two months later. It was a small gift but the last one. It didn’t cost me much, but it was the best money I’ve ever spent. This is an activity I’ve used several times since then with a variety of different audiences. The results have been interesting. In the best column, frequently listed items include a house or mortgage, a car, education (for self or for children), savings, investments, and health insurance. Some other items include helping a family member or friend, a vacuum cleaner, car maintenance, a loan to a family member, son’s orthodontist, and the divorce. What are some of the things that have tended to be listed on the worst side? One of the most frequent is the car or truck, just as it was often on the best use side. Others include clothing never worn, going out to eat, fast food, snacks, credit cards, cosmetics, partying, the time share, expensive toys for the baby, dental work, iced coffee at the convenience store, gifts for others, the boat, gambling, cigarettes, and the phone bill. I often wonder what the story is behind some of these items listed, but because the responses are anonymous, I can’t ask about them. If we try to look for a common theme or connection among these responses, one is that on the list of the best uses of money, most were thoughtful decision or spent on things that would last. Another is that it was spent on needs rather than on wants. Among the worst uses of money, many tend to be impulse purchases. If fact, many people simply listed “impulse buying.” Another thread is the small expenditure that was repetitive but added up to a large expense over time, such as the iced coffee or snack. They probably didn’t realize how much they were actually spending on these items until some emergency came along and they had to look for some way to save. Some things listed were simply mistakes such as the car that was a lemon, the bad repair job on the car, or the dental work that may not have been done satisfactorily. Another group, things that could be considered as status symbols, reminds me of a quote by Will Smith who said that “we spend too much money we don’t have to buy things we don’t really want to impress people we don’t even like.” If you were to list your best and worst uses of money, what would your list look like?

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