Tuesday, March 27, 2007

The Threshold

No, not as in "Mr. Ghana is carrying me across..."

Do you have a spending threshold? A certain amount above which spending money starts to freak you out? I think mine is $400. Below that, it's not that spending money doesn't bother me, but somehow spending $300 or so is something I can take in stride as a reasonable level of expense. I know I don't do it everyday, and if I spend that much, it doesn't tend to be on anything crazy, so I can handle it. But once I see a 4 at the beginning of the number I start to have doubts. It starts to seem like something really major that needs extra consideration.
Perhaps when I was younger and had less money, I had a different threshold-- maybe $200, maybe $100, maybe less. I seem to recall that the summer after I finished high school, I bought a pair of boots for $89, which was the most I had ever paid for shoes at that time. It seemed like a lot of money, but ok, since I knew they were good, comfortable boots that I would wear a lot. But then I wanted a leather jacket that was $150, I think, and that was something I anguished over, put on hold at the store, then put on layaway to pay for in 2 installments to soften the blow. Of course, given the college expenses I was facing at that point, I should have been even more anguished and probably passed up the leather jacket completely... especially since it turned out to have been kind of a tragic 80's "Glamour Don't."

Anyway, I was thinking about this because I think I am ready to order a bed and a bookcase but I keep having this reluctance to commit myself. It's so difficult to just pick up the phone and finally spend that money, despite the comforting presence of the extra bonus and tax refund cash in my savings account right now!

15 comments:

Anonymous said...

I guess my threshold is 50 bucks. But I'm pretty cheap anyway...

Leanna said...

I'm only 22, and I suppose, now that I think about it, my threshold is pretty small. I'd say anything over $100 I start to rethink. But I would assume that that comes from only making 9.75 an hour - it's not like I have much money to throw around. Love your journal, by the way, I read it all the time.

3 Things About Money said...

Good question! I guess I have to break it down into categories...25 bucks is my threshold for sheer impulse buys, maybe 100 bucks if I find something on sale I have been looking for...over 200 bucks and I start to get anxious. Hmmm, I will be reflecting on this question....

Anonymous said...

I have categories, too. If I'm buying a suit for work, $250 is my threshold (but I'll sometimes pass it for a very nice suit). Other types of clothes, the threshold is much lower ($35). Eating out, $10, which tells you where I eat out. :)

Anonymous said...

I just crossed the mother of all thresholds, after shelling out $995 (sounds better than a cool thousand) for a Marc Jacobs bag. After scraping and scrimping by in my early 20's and finally having a bit of disposable income, I decided it was high time I treat myself to it. It is classic and will last forever and it's gorgeous. And to echo L'oreal, I'm WORTH it.

frugal zeitgeist said...

Depends on what it's for, but anything north of $100 usually gives me the vapors.

Miranda said...

Ah, the threshold. It does seem to rise with income. I remember when $50 was a lot. Now I think nothing of $100 and I have to get to $300 before I really stary thinking about it.

But having that threshold is a good thing. It can help prevent buyer's remorse.

LoanShak

tAnYeTTa said...

i'm with frugal Z on this one too.

in your case a bed and bookcase is a worthwhile purchase. do you have an ashley furniture near you? check them out!

p.s. anonymous--- marc jaboc $1000 purse? really. dang i'll never be big time i guess :)

Anonymous said...

Well, a bookcase and bed will be long-lasting since you have your own condo now. Actually I would highly recommend getting some quality stuff so you don't end up hating them and having to get new ones (and you're not putting the purchase on credit)SO GO FOR IT

Anonymous said...

This is a good question and like some of the others I think I have different spending thresholds for different things. Sometimes I think it is good to challenge your threshold. It's easy to always go for the cheapest item but sometimes it falls apart quickly and you would have been better off challenging your threshold and paying more in the first place.

I have another threshold that I've become aware of since getting a mortgage: the point at which I start to panic when my savings dip below a certain threshold.

Pre-mortgage when I had lots of savings it was probably $10,000. These days I can have just $5 in my account and only feel a mild sense of panic but that is because I had a rocky financial ride at the beginning of last year and having survived that I think my panic threshold has changed.

hazygrey said...

I think it's about $50 for meals, and $100 for other purchases (mainly clothes). It's not really a threshold for freaking me out, but a threshold under which I find it very easy to spend.

Kevin said...

My wife and I have a threshold of around $100. We're young though and newly married, trying to save for a house. It we were rolling in the cash it would be a little bit higher.

For now, she finishes school!

limeade said...

I don't really have a threshold for spending because there are different categories. There would be different amounts for different things such as food, clothing, toys, or concert tickets. I take things on a case by case basis.

Nice blog.

-limeade
http://fiscalmusings.blogspot.com

papergreen said...

i'm broke and/or cheap. spending $40 or more on anything other than two weeks' worth of groceries gives me very small yet very real panic attacks.

StyleyGeek said...

Mine is definitely $100. Anything over that and we are talking long weeks or months of researching the best options, comparing prices, and agonising over whether I really need it. I'd never spend more than $30 on an impulse buy, though. The area between $30 and $100 is where I will happily shell out for something if I really need it and have been thinking about it for a while, and as long as it doesn't reach three digits, I can be sure I'm not likely to have buyer's remorse.

Hm, I wonder if spending limits like this are what make the difference between the frugal folk and people like my parents. I know for a fact my Mum will happily spend several hundred dollars on an impulse buy, and it isn't until the number reaches four digits that she even bothers to compare prices. I've never seen her experience any twinges of buyer's remorse, either.