If given a chance, would you place your money on a $1,000 bottle of wine over one that costs $250? In another perspective, you love music and own many headphones; would you spend $10,000 (yes, that’s right) on a pair of high-end cans over one that costs $1,000?
The California Institute of Technology observed how costs affect our perceptions and experiences of high-priced goods as being highly rated and more preferred over less costly options, even though the quality is the same.
Why do people spend more for quality that is the same for less? If budget is an issue, where is money best spent as well?
Best Experiences
The answer to the above question is, yes; we may spend top dollar on something in exchange for a quality experience, regardless of the “actual” quality they may offer. In most cases, though, there is indeed a step up in quality when people pay more.
Joshua Cartu, for example, is a race car driver and a collector of Ferrari vehicles. He says that accumulating material things do lead to happiness, but becomes less rewarding each and every time. He instead highlights that spending on Ferraris enables him to be part of a community he loves as well as spend time with people sharing the same passion as he does.
Flaunt it If You’ve Got It
Cartu also shared that people spend big to show how successful and helps signify their arrival; over time, he also learned that the need to impress others began to fade away. The materialistic nature of goods such as designer bags also means that their value is not as high as they once were due to their frequent appearances.
Instead of splurging on material things, people have placed more focus on experiences instead of the status symbols of material things.
Feeling Good
According to Michael Norton, a psychologist and professor from Harvard Business School. One of the simplest reasons why people splurge on goods is because they want to feel good and make themselves happy. Norton also highlights that splurging on expensive items don’t add up to increased happiness over time.
Instead, the amount of happiness determined will depend on how money is spent, not how much.
Where Should You Put Your Money?
You’re getting tired of living luxuriously or want to spend money wisely. What can money buy that will pay off in the long run? You can liken it to a gourmet chef accepting only the finest ingredients available and using them for cooking masterpieces.
Or construction firms investing in quality heavy equipment repair in Salt Lake City for worn down machinery. People spend big on investments that are safe, beneficial and last them for life, like a building foundation that won’t fail and get five-star reviews from happy diners.
Health and Wellness
Spending big on your health would mean your older self thanking you. Spend on a mattress that comforts you when you sleep as you’ll be sleeping for many hours in your lifetime; spend on a good toothbrush because your teeth and gums don’t grow back.
Buy food that will make you feel better and contribute to a longer life as well as a good pair of shoes that can get you places. You can do no wrong investing in a better quality of life by taking care of your health.
Work and Education
Planning on a Master’s Degree or pursuing further studies? Investing in improving your skill sets and gaining knowledge has a far better return compared to spending on luxury goods that won’t bring you much benefit and experience.
At work, invest on a stylish and timeless set of clothes that help you look professional and reputable as you’ll be seen in them frequently; a good briefcase, watch or bag also wouldn’t hurt as they are practical and always in use.
Giving to Others and Experiences
Buying luxurious things for ourselves makes us happy; that’s why we buy them. However, they don’t really hold well over time. Instead focus on spending money on experiences by spending on quality time with people, going to events, and giving to others, acts that add up to happiness over time and hold well in the long term.
Instead of purchasing that $1,000 wine or $10,000 headphones, buy that cheaper bottle you can share with friends and buy speakers for other people to enjoy your music.
