When making purchasing decisions, we have to come to some determination about how much something is worth to us. We have to put a value on a product and then make decisions based on the difference between how much it costs and how much it’s worth.
I don’t go overboard with my purchases, and to avoid making impulse decisions, I use a tactic that has served me well: The $1 rule. With each potential purchase, I ask myself if I would pay $1 per hour or per day for that item, depending on what it is.
The $1 Rule in Practice
When my brother went abroad last year to take some time off before college, I inherited his xbox 360. I grew up without a video game system, but as the youngest child, he was entitled to the gaming system of his choice. I guess I shouldn’t complain because now I get 10 months of enjoyment out of his being spoiled.
I’m not a huge fan of shooter games, racing games, or role-playing games. What I am into is Tiger Woods PGA Tour ’09. I was obsessed. I played about 4 hours a week, sometimes to earn points and get myself the nicest clubs, hat, and cool shades, and other times online with friends. I REALLY enjoy playing. For $15 plus $35 for a one year subscription to Xbox Live Gold (which allows me to play live online), this may be the best purchase I’ve ever made.
For the video game, paying a dollar per play is an easy decision. Would I pay a dollar to play for an hour? You bet! And when I play more 50 hours, I “come out ahead.” I believe I’ve already passed that mark and I’ve enjoyed every minute. Plus, I can now watch Netflix movies instantly on my tv instead of just on my computer, which is just another added bonus.
When I buy a $40 shirt, will I wear it 40 times? If it’s a shirt I would wear either to work or out with friends once every two weeks, I’d need to keep it for over a year to get my money’s worth.
Each person has his own limits and can decide what they’re willing to pay for fun. This system has kept me from making unnecessary purchases and figuring out what is valuable to me.
Readers, what is your ‘$1 Rule?’