Booking under: Nicole
Two weeks ago, a global consulting firm published the 2016 Cost of Living Rankings. People would think metropolis like New York and London would make the top 10 most expensive cities in the world to live in, but they slipped to only 11th and 17th place this year. Surprisingly (well not too surprisingly), the ranking was dominated by Asian cities, with Hong Kong hitting the top of the list.
Having the honor to live in the most expensive city in the world, how do I manage my finance and maintain my happiness level at the same time? This month, Gretchen shared some interesting tips that I could take reference to Buy Some Happiness.
1. Indulge in a modest splurge
Since primary school, I have developed the habit of wearing a watch. For many years, it helped me keep track of time and cultivate effective time management skills. Now that smartphones are becoming more prevalent, many people would just pull their phones out to check the time on the digital display. For me, I still prefer the old-fashioned way of wearing a watch. Watches are functional and can stand the test of time. They are also a form of self expression and can reflect the wearers’ personality.
Earlier this year, I designed and ordered a personalized mechanical timepiece for myself as a reward for a year of hard work. This purchase indeed made me feel happy. Then when I thought about it more deeply, it is the uniqueness and the functionality of the watch that excited me and I love wearing it to work. Of course, my point here is not to buy a new watch every now and then but to indulge in a modest splurge as Gretchen said. At the end of the day, it is people’s choice to accept whether they are willing to be satisfied with what they have regardless of the value of the splurge. Happiness is always a choice.
2. Buy Needful Things
As an Economics major, I am always keen to explore the relationship between consumer behavior and competition in the world of real markets. Individuals often make irrational purchase decisions that do not follow the predictions of economic models. On a high level, purchase decisions are influenced by social, psychological, and personal factors beyond pricing. Over the years, marketers have been applying Behavioral Economics to their businesses and exploit behavioral traits in consumers to obscure information and maximize their profits.
Here Gretchen shared her decision making process for ordering business cards that can be well illustrated by the concept above. Satisficers like herself settle once their purchase criteria is met and they do not bother to look for better options. In contrast, maximizers want to make the optimal and best possible decision. It is the final result of a careful weighing of costs and benefits. Depending on the categories of purchase, I think I am a mix of both, like most people. I consider myself a practical buyer and usually plan my purchase in advance instead of making impulse purchase decision on the spot.
For simple items like cotton swabs or hair bands, I am a satisficer who would just visit the store quickly, pick the ones I usually get, and then pay at the register. For other more personal items like active wear and running shoes, I am characterized by the mentality of maximizer and prefer gathering enough information before making a well-informed decision. At the very least, I need to try on the sports clothes and make sure they are the most supportive and comfortable when I work out.
While retailers are experts in packaging their products, making small changes to the details of an offer can influence the way people react to it. My commitment here is to be a wise consumer and make educated purchase decisions. Seeing attractive deals does not mean I have to bring the stuff home. Whether the item is truly needed and functional are my top priorities when making a purchase decision.
Personal finance management is always an important subject that should be started sooner than later, especially for young adults. It may not be taught in black and white in schools, but good planning and understanding of where our money goes will definitely help make our lives easier and happier. In return, that will give us the resources to help buy more happiness. With Gretchen’s sharing on spending, I am interested to see how my happiness level will be boosted this month. Before checking with me to see how I do with my commitments in two weeks, Keith will share his next week. You don’t want to miss it!