It’s Not Being Miserly…
…It’s about ensuring your purchase is worth the money spent
There are occasions when you learn the biggest lessons of life from the unlikeliest of sources. Such learnings remain ingrained in your psyche for a long time.
They inspire you so much that you put them to use on a day-to-day basis, hoping to derive practical benefits from them.
On one such occasion, a professor who seldom went beyond textbook teaching, and whose lectures more often than not ensured ennui, somehow deviated from his usual style to teach something that seemed relevant in real-life scenarios.
“To focus on the economics or having an economist’s mindset is not being a miser,” he said in that particular session, adding, “It is being someone who continuously looks to derive value out of his expenditure.”
They don’t teach this in the class
Years have passed, but what he taught back then still rings a bell and I remember everything he had said during that lecture. Those words never seemed bookish. Instead, they always make sense. Being economical or frugal is not the same as being parsimonious.
Having an economist’s mindset is neither about always trying to save nor is it about the unwillingness to spend. It is not about being miserly (or stingy) either, but more about avoiding profligacy. It’s basically looking to derive maximum utilization from every product or service one pays for.
Thinking like an economist essentially means to attach a value for money concept to every purchase made.
From a pragmatic point of view it makes for perfect sense. When you incur a certain expenditure, you are well within your rights to expect the quality of products (or the services) on offer to be up to your expectations. It is this value attached that ensures personal satisfaction in the final analysis.
Anything less is not only disappointing but also serves as an eye-opener, making you again realize something that you were always aware of — that there is always an alternative available. Having such a mindset means not only unnecessary expenditure can be avoided but also maximum satisfaction can be ensured, from other alternatives, of course.
There can be no better example
To be honest, I never quite liked the professor, but I loved the golden words he uttered that day. Even as I made a transition from student life to the corporate world, what he said back then is not only deeply embedded in my mind, but I also try to utilize the wisdom on a day-to-day basis.
Besides the fact that I love to travel, professional requirements have ensured I straddled cities and countries on a regular basis. Being a frequent flyer, I believe to explain things, there can be no better example than citing travel options. So here is one.
What’s the first thing you do when planning a leisure trip?
Look for cheap airlines. Am I right, or am I right? In your quest to search for low-cost carriers, and save a few dollars more, you negate the problems that accompany them. On the contrary, if you book yourself on a flagship airline, by loosening the purse strings a little more, the booking comes with a lot more guarantee. This is precisely what the value for money concept is.
This is what I did
From the above example, you may have deduced I prefer convenient air travel over cheap ones. Let me cite another example about something I keep doing. In fact, it is something I opted for only a few days back.
If it is a short vacation, I prefer not to book rooms in advance. Instead, the usual practice is to reach the destination and look for rooms at a reputed hotel chain. I believe it guarantees both comfort and safety. It is particularly important if you are travelling with your partner, as I was on this occasion.
The reception manager offered two types of rooms. They were of the same dimension, but there was a noticeable difference in the pricing. His explanation was the higher priced room offers a view of the medieval old town. It made little sense.
I opted for the cheaper option, and enjoyed the view of the city center from the window of my room while all I had to do to get a view of the old town was to come out of my room and stand in the corridor. Besides, I also had the option of walking down to the old town. It was only five minutes away.
The point is, it is never about being miserly. On the contrary, it is about avoiding being a spendthrift. It is about spending your money wisely. It is about being smart. While I may look for convenience when it comes to flights and hotels, I will not fall for every silly marketing gimmick, especially ones that make little sense.
Then there are friends…
I was on a business trip to Sweden, and the plan that day was to head to the pub in the evening. By the time we began, my friends were almost through with their second drink. I failed to get hold of the idea at first.
What is the point of going to a pub/bar if you have had drinks beforehand? I wondered. Their reasoning, albeit, was soaked in pragmatism.
Because the alcohol is so expensive in Sweden, it is neither surprising that people have a couple of drinks before heading out nor the fact that they have their own drinks while strolling down the promenade. The idea is to minimize the expenditure at the bar. To this end, many also prefer to import alcohol from other countries — where it is cheaper.
This particular example also made me remember something that I had long forgotten, rather never paid any heed to. In the final days as a student as also the early stages of professional life, there was a time when I had actually seen friends having a few drinks before heading to the club.
Their explanation, ‘it is expensive out there’ was also coated with pragmatism, but didn’t ring a bell because I was an abstainer back then. It does now because I enjoy a drink or two on the weekends. No points for guessing how many drinks I had on that fateful evening in Sweden.
To sum it up
Having an economist’s mindset is important. Examples like the ones above have made me understand it again and again.
Let me reiterate that it is not about being parsimonious. Such a person is not a miser. In fact, far from it. On the contrary, it is about looking for value in every expenditure made, your money’s worth, that is.
It is about being careful as opposed to being wasteful. It is opting for balance over extravagance.
It is about being logical as opposed to being prodigal.