Tuesday, November 11, 2008

Is It Crazy to Spend $1000 a Month Buying DVDs?

Now that the economic crisis has become a fact of life, there is no shortage to news articles about people cutting back and trying to save money, spurred by the fact that their homes are worth less. On the front page of today's New York Times, there was an article about a town in California where most homeowners are underwater on their mortgages: A Town Drowns in Debt as Home Values Plunge. Almost 90% of the homeowners in Mountain House, CA owe more on their mortgages than their houses are currently worth. Ok, that is scary, but here is the part of the article that made my jaw drop:

Kenny Rogers, a data security specialist, moved into Mountain House last year, buying a foreclosed property on Prosperity Street for $380,000. But the decline in values has been so fierce that he too is underwater.

He has cut his DVD buying from 50 a month to perhaps one, and is waiting until the Christmas sales to buy a high-definition television. He does not indulge much anymore in his hobbies of scuba diving and flying. “Best to wait for a better price, or do without,” Mr. Rogers, 52, said.
Whoa-- he bought 50 DVDs a month???? I read that and thought this guy must be insane!
Now, granted, this is my personal bias. I don't own a TV and though I enjoy watching movies, I'm perfectly happy to have the cheapest Netflix plan where you rent a maximum of 2 movies per month. I own a boxed set of Greta Garbo movies because I'm obsessed with her, and one of these days I'll ask someone to give me some James Brown concert footage DVDs too, because that seems like the kind of thing that is worth owning-- and I acknowledge that I am nuts in this respect. But otherwise, I can envision very few instances where owning DVDs is really necessary. And even if you are a huge film buff, do you really need to buy 50 DVDs a month? How do you have time to watch them all!? And how much is a DVD to buy, anyway-- say $20 on average? That would be $1,000 a month on DVDs!

But my point here isn't really to trash DVD buyers-- it's more about the judgments that different people make about others' spending. I still get lots of backlash on a post where I dubbed MBT shoes a don't-buy (and to those commenters may I just say that I never criticized the comfort level of these shoes, I just thought anyone who bought them expecting to have their cellulite melted away was wasting hundreds of dollars. And I stand by my personal opinion that MBT shoes are ugly-- sorry!). Many people have no problem spending lots of money on MBT shoes, but they might think I was nuts for having spent an equivalent amount of money on a Treo PDA. And the 50 DVD guy might think it's crazy to spend $1,800 a month to own a 2-bedroom apartment in Brooklyn.

We can all aim to live our lives without judging others' spending habits, but let's face it: we do it anyway! Has your jaw ever dropped when you heard how much someone else spends on something that you think is unnecessary? Or do you feel you have to spend money on something that other people find absurd? And in these current economic conditions, are these spending habits changing?

23 comments:

Laura said...

In college, I dated a guy who came from a pretty wealthy family. I didn't have a lot of money in college (though even the amount I had was probably more than some people had), but I will never forget when he complained about his monthly allowance... which was $100 more than I was getting PER SEMESTER! I thought "how dare he complain," but at the same time, he was comparing his allowance to that of his (elite) fraternity, where a lot of the guys had so much money they could very literally throw it away and not care. It's all about your environment and what you're used to doing.

However, I will add that I think you and your significant other need to have some kind of similar financial background (or at least similar ideals of what's okay and what's not). I too would be in awe of 50-DVD-a-month-guy thinking he's cutting back!

mOOm said...

Yeah, I was surprised by that 50 DVDs a month. But more because there are only 30 days in the month than due to the cost. Maybe they are used DVDs from rental stores. Who knows.

five tomatoes said...

I don't think I've spent $1,000 on movies in my LIFE! How ridiculous.

Also, I work at a store that sells MBTs (sigh) and while they are pretty popular and everyone seems to like them, I hate their ad campaigns. The latest display we have says "We're pro-body" and during the election I had customers coming in to buy the "shoes that are pro-life." Seriously. Personally, I think they are comfortable and starting to get better looking, but I'm still not sure that they're worth it, even with my 30% discount.

Anonymous said...

What are MBTs other than some type of shoe?

Taisha said...

The likelihood of 50 DVDs costing $1000 is slim. But really, is $500 that much better? $300? When does it become acceptable? I myself am a DVD collector, so I understand why someone would buy 50 DVDs a month, but I could never afford to do so myself.

You know, to be honest, I find it amazing that people can put so much into their 401(k) accounts and into investing, and never feel like it's enough. I know people with enough money in their bank accounts to live a comfortable retirement, yet, they think it's not enough. DVDs or savings accounts, when is enough enough?

Tim said...

first, i really don't get why Mr. Rogers is concerned about being underwater unless he is planning on selling the house or he bought the house with interest only or an ARM. The cost of the house should be the same, otherwise, so there is something evidently more to the story that is forcing him to make cutbacks on hugely discretionary spending items.

I have plenty of DVD's but doing the math, it doesn't make sense these days when you can rent through netflix or online for cheaper considering how much people watch the dvd's they own.

You are absolutely correct, though, that when it comes to want items, it does come down to personal taste and we all value things differently. I don't enjoy and can't understand why people collect comic books or smoke $10 cigars; however, I am fascinated by watches and pens, and had no inkling on spending $17k recently on a watch and another $2k on a pen. i also consider myself an audiophile and have justified spending upwards of $60k on a stereo system. But even given my spending eccentricities, i still look for bargains when i buy. I think the lesson isn't what you spend your money on, but how you spend your money on the items you value and enjoy and can afford.

Caleb said...

Netflix is great but for recent new to semi new releases Redbox is pretty awesoem. Just $1 a night and no waiting for the mail to come.

Susy said...

It's all a matter of personal preference. I sometimes am amazed when you post how much you spend on eating out & alcohol. I don't drink simply because I think it's too expensive.

But I did buy a $700 espresso machine that we use 2x a day for delicious lattes & cappuccinos.

We are also Netflix lovers especially the new instant movies on-line.

Shawnna said...

This is quite timely. I recently realized I own my DVDs for no reason, so I'm selling them. Posted around 8 or so on Amazon this Sunday and already banked around $50. I'd rather borrow my least used items than own them.

H said...

I was also surprised by the 50 DVDs a month.

When I was in college, this guy made fun of me because I would splurge on European butter. It was probably two or three times the cost of regular butter, but since I only ate it for toast at breakfast, I don't think it made more than $5 difference per month. On the other hand, I would show him the CDs I bought and he didn't think that was extravagant, even though I spent tens of dollars a month on those.

RDS said...

People spending large amounts of money on things that I don't want or need is amusing to me if their finances are under control. If they can't pay their bills, have no money in the bank, or don;t save for retirement, then I tend to see it as evidence that our society has lost the ability to assess the value of things.

RDS
http://www.smartfinancialvalues.com

MEG said...

I have to assume that's a typo. It's far more likely that the writer mistakenly added a "0" to the number 5 than that this man actually buys 50 DVDs each month. Cutting it from 5 to maybe 1 a month is much more reasonable.

Studenomist said...

You know those days where you feel bad because you bought something that you really did not need. Hearing about other peoples insane splurging habbits makes me feel a bit better on those days..

kiwiblogger said...

Wow! 50 DVDs per month! I really like this fellow. If only this crisis was for us about to reduce amount of DVDs we are buying I wouldn't worry about it at all! In fact this news is quite inspiring, because it shows how far we (or at least some of us) are from the bottom. And I with all my heart wish us never hit it.

Anonymous said...

I have to agree that "50" is probably a typo or an exaggeration!

Anonymous said...

That guy is obviously a moron.

KD said...

My husband & I have decent professional jobs, no property, no retirement or investments, and no kids, and yet we still struggle on a monthly basis. Most can say they splurge on designer clothes, excessive DVD collections, or pens and watches...while we chunk money into our student loans. Both of our parents made too much money to get any financial help, too little money to contribute combined with the ethics to force us to pay our own way. I can't even say our credit card bills have been the result of shopping sprees, alcohol, or dining but instead racked up from school supplies, much needed work attire, necessary living expenses, and travelling home to visit family.

So when someone says they spent $1 billion on an election campaign, $17K for a watch, or $500+ on eating out I gasp and feel envious at the same time. In general I've come to the realization its quality over quantity and opt to cook more, take my lunch to work, and buy EVERYTHING on sale...and then take that much needed vacation every 5 years!

Kim said...

I read the article yesterday and did the same doubletake...50 DVD's a month...seriously!

Here's the rub. Other people's spending choices both amaze me and seduce me depending on the item in question. What I'm working on within myself is "why am I seduced?". A couple of thoughts I've had on this come from others, but are helpful as I muddle through. 1) Don't spend for status. 2) Focus on being, not belonging.

So my current thought is that my seduction is either status seeking or belonging, both of which are born of insecurity...which we all have in one way or another. I'm not sure what this says about 50 DVD man.

Middle Class Hick said...

Being an avid collector of legal media (ie. not a pirate), I have about 500 DVDs and 3000 CDs. I can see this very easily. You are talking TV shows as well as movies. What the guy is saying is absolutely true. The first week they come out, every movie is 14.99 at walmart. They immediately go to 19.99 for the next month or so. If you wait for black friday, every movies is 7.00 or less. Even those that came out a few weeks ago.

I agree it might be an exageration or type. 20 would be more plausable. However, the dude did not say he was swimming in debt. He said that since he owed more than his house was worth, he was tightening his belt until he got out from under water. This does not mean he was putting it on credit cards and not paying it off, just that his home value was changed, and he did not want to get caught without the money.

I can completely understand. 1 year ago, I could pay off my two houses. Now with the stock markets tanking, I cannot pay off one. I am cutting back on stuff just to make sure. Now I am not going to default anytime soon - but I can see the rationale. If you had at one point the ability to be "above water" or what not, then now you are not, then you cut spending.

I don't know how many of you are Mythbuster's fans (on discovery) however they showed Adam Savage's house. Dude spend money on all sorts of stuff that is useless. Just because it makes him happy. Each person is different.

Miss M said...

We dont buy a lot of "stuff" so these stories always amaze me. How many movies can you watch in a day anyway, and if you are buying them rather than renting that means you intend to watch them multiple times. You'd have to spend all day watching movies to make use of your collection. The problem with this type of "collection" is that new technology will render it worthless. I know a lot of people who had a nice collection on VHS tape, think of all the money spent on them and now you have to start over with DVD's.

Middle Class Hick said...

It might be or might not be more beneficial to purchase a movie. You never know until you have at least seen the movie. Take this summer. I saw only 2 movies in the theater. I have purchased several of them on DVD. Why go to a theater, when I have a perfectly good home theater at home, I don't pay $9.00 a matinee ticket ($10.00 for evening shows) a person before food. I can have popcorn, a beer, and watch a movie. If I like it - and I watch it again, it was a good purchase. If not, then I was mislead by reviews, previews, etc.

I think the big thing that sometimes people miss when they say they purchase movies, I look for deals. I just bought Fight Club. Never seen it. I got it for a 2/$6 at best buy. I could have rented it for $5.00 at the local blockbuster plus gas. However, I waited until it was on sale. Lots of movies I do that. I don't pay top dollar (or 1/4 top dollar, see my previous post) unless I know I am going to watch it 5 times at least. Transformers, Indiana Jones, Harry Potter, things like that.

Again .. It is all a matter of what you want to spend money on. Any of you out there have pets? I would not be caught dead spending a penny on an animal. My preference. It is the 6th highest expense (on average) any home has. Taxes, Housing, Children, Food, Insurance, Pets (in that order).

Anonymous said...

Yep-- probably a misprint. Someone who bought 50 per month probably wouldn't be able to STAND going down to 1. The 50-per-month guy would probably be cutting back to 30... NOT to 1.

Tim said...

@kd: I wouldn't be envious at all, because those aren't your values and you aren't presumably in the position at the moment to spend on all your eccentricities. The danger is comparing yourself with others without knowing anything about them and trying to compete with a facade. I learned the hard way earlier on, but recovered from it and now we are very secure. So although we may have eccentricities like everyone else, but different, we measure them according to what we can afford. We live on about 20%-25% of our income (around $40k/yr expenses), pack our lunches for the week, maybe go out to lunch once a week with friends, don't have any debt, live in a smallish 2 bedroom place, etc.