The Value of “Only” $40

Earlier this week a friend asked me out for dinner at a pretty pricey restaurant. Having been there once before for a special occasion I knew that the food and service wasn’t that great and definitely not worth the price tag (at least to me). I declined my friend’s invitation. When she asked why, I told her the truth. “It’s at least forty dollars for dinner for one person, and the food’s not that great. I’d rather save the money, but if you’d like to go somewhere else. I’m open to that.”

Well, my friend wasn’t open to changing the plans (rightfully so, as she’d invited other people) so I didn’t go out to dinner that night. But before she gave up on me entirely, my friend tried one last plea: “Come on, it’s only $40. You can afford it. It won’t make a big difference in your budget.” I politely declined again and that was the end of it. But the conversation got me thinking about value.

The cost of the meal wasn’t my major objection. My major objection was that the $40 held little value for me, since I didn’t care for the food or the service at the restaurant. The only value in this equation was spending time with my friend. While I can argue that spending time with her is “priceless,” it isn’t really. If an outing involves money, there is always the question of value. For example, next week we’re scheduled to see an exhibit at the museum and have lunch. That will be a high value transaction for me because I genuinely want to see the exhibit, the restaurant we’re going to is excellent, and I get to spend time with my friend.

Had I cared for the restaurant that she invited me to, I would have gone with my friend because the value (good food, good service, plus time with friends) would have been high enough to justify the cost. Similarly, if my friend lived a hundred miles away, was only in town for the day, and really wanted to go to this restaurant and nowhere else, I would have gone to the restaurant because I would place a high value on the very limited time we would have together. However, the circumstances being what they were, I declined and decided to save the money for something of more value to me.

Every time we use money we are (or should be) using it in ways that give us the most value for the dollar. (There are times when you have to do things that have no value for you, such as when your family wants to do something you don’t want to do but you go along to keep the peace, but outside of these circumstances we should be looking for high value when using our money.) When my friend says, “It’s only forty dollars,” she’s both right and wrong. Sure, it’s only $40 and it’s not likely to break me. But if I spend that $40 on something that has low value for me (dinner at an overpriced restaurant with bad food), I don’t have that $40 to use on something that does have high value for me. Since I am careful with my money, I want the most value that I can get for each monetary transaction.

I started thinking about all the things I could do with that $40 that would have high value for me and I came up with a lot of things. I could save it and let it earn interest. I could spend it on my next outing with my friend. I could buy a new game for my Wii that my family can play together. I could use it on a medical copay at the doctor next week. I could buy the cookware I’ve had my eye on. I could send flowers to my mom. I could take my husband to a nice dinner. I could buy a couple of new books that I’m dying to read. I can buy gas and go to the beach for the day. I could throw a little get together and invite people over to play with the Wii, watch football, and eat some snacks and pizza. These things all have high value for me. They are things that will bring me joy, enable me to spend quality time with my friends and family, keep me healthy, or improve my life in some way. To me, they are a much better use of $40 than dining at a pricey restaurant with bad food.

Everyone’s value system is different. Perhaps you could have overlooked the bad restaurant and gone with your friend and still considered the $40 well spent. That’s fine. The point is that, whether it’s $10, $20, $40 or more, the way you use your money should bring you value. Sure, you can use money a few times in low-value transactions and not be hurt. But when money is limited or you are spending a lot on low value items, you have very little money left to use for things that bring you high value. Once you get used to thinking in terms of value, it becomes easy to identify whether your spending is going to make you happy or not. Asking yourself before laying down money, “What value am I getting out of this?” will save you a lot of disappointment and wasted money down the road.

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10 Responses to The Value of “Only” $40

  1. ANOTHER great article Jennifer.

    So true.

  2. I agree, I won’t throw money out a moving car window either!

  3. lizajane says:

    Great post! I think too often we feel “guilted” into doing something with comments like your friend’s.

  4. Aryn says:

    I’ve been thinking about this issue a lot recently. Thanks for another perspective on it – I completely agree.

  5. Larry says:

    your reasoning is very justifiable and yes, sometimes you have to bite the bullet for some QT with a friend. i’ve been through a few circumstances that i thought the same as you and ended up offending people. it’s a touchy subject.

  6. Jo says:

    I absolutely agree with you. Great article.

  7. Susan says:

    Yes Jennifer, I too constantly find myself walking away from purchases when I really give it a second thought and think, no, that’s not worth it to me.

  8. a91030Mom says:

    Thanks for a wonderful article.

    I make these calculations all the time. Another thing that I place a high value on is patronizing local family o/o businesses. Places that have bad food and service don’t deserve a return visit. I believe there are many good places out there vieing for my business and they deserve a shot and my repeat business. Places with bad food and bad service do not!

    As you can maybe tell, I love to eat out, but hate wasting money *and* an eating opportunity, which is why I am very proactive in *originating* the invites. When I do the inviting, I pick the place and we all wind up happy because my friends know I’m a tough customer and put a lot of thought into the restaurant.

  9. Minny says:

    I absolutely agree with you.

  10. Gail says:

    I think it is odd that anyone can look at another person and tell them what they can and can’t afford. No one except a spouse should know those fine details of another’s finances, so in reality, this young lady was guessing that you could afford the $40 and that is making a big assumption in this economic climate! $40 is still a lot of money to me.

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