Should You Really Be Buying That? How to Decide If a Purchase Is Really Worth It
“It was totally worth it.” In this case, “it” referred to a Vitamix blender that a friend recently had purchased. He wasn’t the first. Indeed, I don’t know anyone who has purchased a Vitamix blender and didn’t share my friend’s effusive sentiment, even after spending between $429 and $719 (for the new line of G-Series models). For a blender.
But despite my appreciation for these friends and their opinions, I can’t help but notice their errors in judgment, explained by behavioral science, that, if followed, could lead to an unwise purchase for you or me.
To be clear, it’s not their purchase of the blender that I’m questioning. Rather, it’s their insistence that said purchase is a universal must. Worth, you see, is relative. What is “worth it” for you may not be “worth it” for me. Ultimately, determining the worthiness of your next purchase depends on many factors, but chief among them are 1) the joy you receive from using the product, 2) your personal cash flow, 3) how much you will use the product, and 4) the cost of available alternatives.
Utility
In economics parlance, the benefit you derive from using a particular product is called “utility.” And the concept of utility does range beyond mere pleasure. One person, for example, might want to buy a new Tesla Model S because of the inherent thrill he receives in being transported from “zero to 60 mph in as little as 2.8 seconds.” Another person might be motivated to buy the same electric sports car because of the perceived satisfaction derived from not (directly) using fossil fuels to power it. Most of the time when one of our friends lauds the worth of a recent purchase, it’s the utility talking—but of course this will be different for every person.
Personal Cash Flow
While I hate to be a spoilsport, I’d be irresponsible not to address what might be the most important factor in determining whether or not a purchase is worth it for you: your personal cash flow (or how much disposable income you have). If you’re Kam Chancellor, the Seattle Seahawks defensive back who was willing to forfeit $2 million in pay (and fines) to sit out the first two games of the season in a failed bid to force the renegotiation of his contract, you’ll not likely miss $719 spent on a blender. If, however, you’re a recent college grad with only $500 left over each month after paying rent and utilities, spending the entirety of your discretionary cash—intended for food and clothing—on a food prep device might not be worth it.
Frequency of Use
Assuming you do have sufficient cash flow and you’d derive a meaningful benefit from using a product, the next issue to consider is how frequently you’d use it. The best example, I believe, in determining worth through the frequency lens is that of a boat. If you only get on the water a couple of times a year, the cost of buying, maintaining, storing and conveying a watercraft is exorbitant, at least relative to the boater who is able to compound his utility by shoving off 50 times each year.
Alternative Options
I found myself especially susceptible to the siren’s song of the Vitamix, the blender to beat all blenders, because my wife and I use the appliance three times a day making meal replacement smoothies. That’s more than 1,000 uses per year—certainly enough to justify the expense of a top-flight blender when considering the compounded utility!
But shouldn’t the worth of the $700 blender be considered in relation to other less costly alternatives? The Ninja Professional Blender, often billed as a Vitamix killer, may not carry the cache of the chef’s first choice, but it’s available on Amazon for $80. Now, instead of simply asking, “Is the Vitamix worth it?” we must ask, “Is the Vitamix worth 8.75 times the Ninja?”
And it very well may be, because no one can question the total utility that you, individually, receive from your blender—or your car, your phone or your shoes. But the reverse is also true. Just because it’s worth it for someone else, doesn’t mean it’s worth it for you.
This commentary originally appeared October 10 on Forbes.com
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