⚘ Branches: A rudimentary theory of value

Three default variables for deciding whether to spend money on something

We constantly make decisions about whether to spend money on something. How do we decide that something is worth spending money on?

I think that there are a few variables we take into account the most often. One is the thing’s—or service’s—cost relative to our savings (and financial reserves, assets, etc.) and income. We estimate the cost’s magnitude compared to where we place ourselves on society’s income scale or in the social class spectrum.

Another variable is how the cost compares to other similar options: whether it is inexpensive relative to other offerings of a similar thing. This variable depends on how much we believe the thing is a ‘good deal’ in purely monetary terms. By monetary, I mean that the amount of money the seller asks for is the only number that matters in this comparison; if a thing that is similar in most specs to what is currently offered to us turns out to be cheaper, then it is a ‘better deal’. I will call this a monetarily good deal.

A third variable relates to how much we persuade ourselves that we need or want the thing—that is, how much we believe it is going to bring benefit to our lives.

So, to summarise, at the most basic level of determining buying worthiness, we consider three default variables. We assess whether we feel that we can afford it, whether we view it as monetarily the best deal overall, and whether we believe we need it or would find sufficient gratification from buying it.

In fact, sketch variables would be a more precise designation. The idea of a sketch conveys first steps towards executing a fuller image. In the case of determining buying worthiness, these three variables are only the first crude steps towards painting a fuller, richer picture.

Implicit among these variables is how much money we feel we need to set aside in case we will need it in the near-future to buy more things and services (assuming our wealth accumulation rate won’t change significantly anytime soon). This last implicit variable typically manifests in the thought :“If I save all this money by choosing this deal that is cheaper than that one, I can use those savings to buy other things”.

Signs of maturation in our relationship with money

I think that a part of maturing in one’s relationship with money begins with gradually developing a more acute sensitivity to time expenditure. We are opt for a more expensive option because it is right in front of us, and we do not want to continue looking for other options, or negotiating prices. A monetarily better deal might be jus a few web searches away or in the next store, but we want to prioritise getting it done quickly. Some people incorporate their actual or estimated hourly rate into their assessments: if my hourly rate is 100 euros, then I will be saving 60 euros by purchasing the option I have in front of me—though 40 euros more expensive—rather than spending another hour pursuing a monetarily better deal.

Another sign of our maturing in our relationship with money is choosing high-quality options. These are things that are significantly more expensive, while sharing the same basic functionalities as their standard counterparts, such as consumer-grade products.

The price might be double, five, ten, or even twenty times higher, and someone might even be justified in concluding that the quality upgrade is not proportionally fair to the steep price increase. Still, we pay that premium because we prefer settling with something that we trust instead of experimenting with alternatives (as might be clear by now, these variables overlap, in this case time-expense is also present). Additionally, the thing itself might even feature an understated appearance, cancelling any obvious status-signalling functions which for some would have increased its perceived value.

We choose these high-quality options because we do not want to deal with repeating the process of searching for and acquiring that product for years or decades to come. We want something timeless that works well and is not designed with some type of built-in obsolescence —such as fast-fashion— or programmed obsolescence —such as low-grade electronic products.

Thus, maturing in one’s relationship with money consists in learning to read invisible value tags apart from the usual price tags. High-quality and time-saving are only two of innumerable invisible value tags we can see attached to what we pay for. Invisible value tags are essentially subtractive to price tags because they increase perceived value, effectively diminishing perceived expensiveness in a price tag. In other words, the monetary number attached to the thing remains the same, but it appears to be a much better deal once we decide that its value is much higher than what face-value variables, such as the three variables previously described, add up to.

Invisible value tags in action: overspending in temporary furnishings

The more personal the invisible value tags we become skilled in reading are, the more this is proof of an evolving self-understanding. We will have incorporated clear notions of what is meaningful and important to both us and our path in life as additional markers of value. Given that we calculate buying worthiness by weighing what value we perceive in a thing against its price, all additional value tags that we attach to it will significantly effect its perceived worthiness.

We might even spend money on something simply because we need to prove to ourselves that we do not need it, thereby satisfying a pesky curiosity.

We might spend a lot on carefully furnishing a place that we are renting only temporarily, in a city we know we will leave relatively soon. We might do so because we need to experiment with this space, see what works and what does not, and add clarity to that vague vision we have of the ideal living space for us. We understand that becoming more empirically familiarised with that vision of the ideal living space is a lifetime acquisition (or what we could call subjective consolidation) that transcends the furnishings themselves.

It will certainly be a hassle to get rid of those furnishings once we move out. And to many people, this will certainly seem like unwisely wasted money, because these are not investments in objects meant to be kept long-term, or resold with little loss. In fact, it is assured that we will spend even more money in the future on new furnishing for our new living space in another city. On top of that, we are not acquiring basic, affordable products, but we are being selective about it, willing to spend more on things we are irresistibly drawn to. We do this because entering in an ownership relation with them, and articulating them with the other objects we surround ourselves with in our living space, could potentially lead to important revelations about ourselves.

In any case, thanks to our growingly clear notions of what is meaningful and important to us and our path in life, we understand that the long-term payoff of this lesson largely beats these short-term expenditures and inconveniences. Moreover, the increase in self-knowledge that acquire will feed back into the sharpness of our value tags, gradually turning us into consumers who are much more skilled at making good purchasing decisions.

These are only some variables among many more that we consider as we engage with life aided by all that which the collective work of society can offer to us through trade.

Value auras: learning to see invisible things attached to the physical thing we are buying

The culmination for this aspect of our maturing in our relationship with money is that we learn to see extra invisible things—concepts of things, in a way, or a kind of value auras— along with the physical thing (or service) that we pay for. I characterise these as invisible because, being profoundly personal, they are products of our subjectivity and lack any physical form. This does not make them less impactful than the physicality of what we are purchasing. They are abstractions of what kind of other value the thing will bring to our lives, such as the previously described personal importance of empirically experimenting with the definition of one’s ideal living space.

Abstractions can take any ‘visible’ form in our imagination; the only important consideration is that they invoke their content in our minds. Certain kinds of people see a sports car and only glimpse minimal invisible things next to it adding extra value. For their subjectivity and lifepath, a sports car bring little more than its functionality as a fast car that communicates material wealth to others. These same people might see a guitar and in their subjectivities it would be surrounded by bright invisible elements such as all the fulfilment through the performance, sharing and creation of music that they can bring, along with lifetime acquisition—or subjective consolidations—of learning a particularly impactful craft and so on. The physical guitar might be much smaller (and undoubtedly humble-looking) than the sports car, but the magnitude and subjective radiance of the former’s invisible elements (value tags) will greatly outclass the latter’s. Thus, the guitar’s value aura, which is the sum of all its value tags, far exceeds that of the car.

In the best cases, these invisible things can be important lifetime lessons, revelations, or skills, which are the epitome of long-term because they last for life. We might acquire something that seems very expensive in its price and face-value, but its invisible value tags—that is, the invisible things that would come along with it—will make the price appear almost laughable to us.

As these tags pile up, price becomes less of a number fixed upon the default-or sketch-variables of being a monetarily good deal, its proportional size against our current wealth, or how much we need it in strictly functional or symbolic terms (for example, to project status, to belong, or to boost an identity type). Instead, it becomes merely one among many signals of value. Some of these other signals can make a stark difference, making the price seem absurdly low for what we are receiving on a personal level. Yet, we need to understand ourselves and our place in the world deeply enough to learn to discern these value tags.

Learning to manage our own personal ledgers to receive and create more value

It works as a kind of personal ledger: as perceived value increases through the addition of value tags, its price becomes increasingly nuanced (e.g. less expensive). In this personal ledger, money is merely one of many other signals of value that we are constantly trading in our lives. On the left column we will see what is debited from choosing to buy something; we see variables such as time expenditure, money expenditure, threats to our short or long-term peace of mind, and any other ‘expenses’ or value reductions that the thing might induce. Conversely, on the right column we will see the positive value that is credited, such as what I have described in the living space example above.

The beauty of this personal ledger lies in its absolute fidelity to our personal narratives. The invisible things that value tags represent gain shape from the particular paths our lives have taken and the directions it is organically drawn towards, and how wakefully we have journeyed through them. Moreover, it is important to notice that in the personal ledger money expenditure is merely one out of many other variables comprised in the ‘debit’ and ‘credit’ columns.

This balance is what allows us to estimate buying worthiness, and it involves not only our financial situation but the overarching flux of value in and out of our lives that our buying decisions enable.

So, when we view money in this way, we realise that if we are equipped with a developed sense of selfhood we will make a much better use of it. Conversely, if we fail to learn properly identifying invisible value tags, we will squander our resources, consistently making deals that turn out to be fruitless or even counterproductive in the long-term.

This is because we will obtain much less value for things, in the sense that we will not have a way to reliably choose things with true long-term, personally congruent value. For those unaware of their invisible value tags, the act of making purchasing choices becomes a kind of lottery, a numbers game of face-value price comparison, or an untrustworthy series of hunches.

When we do not understand where value is, we convince ourselves that we need more money because everything seems far more expensive than its actual worth. Worse of all, we might possibly blind ourselves further from the search of the greatest value tags in search of money for its own sake, thinking that it will provide security in a world of scarce value. To be clear, this does not imply that wealth accumulation is unnecessary when we can squeeze the most value out of what we can already access. It simply means that if we keep seeking money for its own sake, out of a sense of insecurity or ignorance of where we are going in our life path, we will never learn (or will do so at a snail’s pace) how to put money at the service of true self-fulfilment, which feeds our sensitivity to invisible value tags, resulting in a more effective use of our finances.

Thus, I believe that the inverse is true: money comes to us when we understand our subjective, personal ledgers. We will spend less of it and do so with a permanently flourishing kind of leverage. Meanwhile, we will be leading a more vitalising, meaningful existence, which naturally attracts and compounds value. And much of that accumulated value can eventually convert to money, as it is ultimately a form of storing and transmitting worth.

It is not a process that takes place naturally nor involuntarily. It demands careful reflection on our daily events, self-honesty, openness to embracing the experiences that we encounter, remaining present through them and processing them instead of suppressing them. It requires active listening to ourselves and thinking about what we are intrinsically curious about, what inescapable desires and interest we have left in the back-burner for so long (I call them Uncharted whispers in this text), what paths to long-term fulfilment are most appropriate for us.

Conclusion: where the cycle of consumerism can be broken

The major upside of such a process is that it liberates us from the vicious cycle of consumerism through the manufacturing of needs and problems and the nurturing of feelings of insufficiency as its primary fuel. I believe the overpowering force of this cycle is rooted in both a lack of self-knowledge (translating into lack of agency in the processes responsible for our existential fulfilment) and an overall insufficiently deep examination of the art of consuming for real personal value.

Consuming is not simply another compartment within the set of actions that we perform in our daily lives (e.g. chores, work, leisure, hobbies, sport, travel, social events). Consuming is a catch-all word for a set of much more complex experiences. The only recurrent commonality binding these experiences is that the mediation of money is involved. Beyond this connection, we are required to identify what these experience actually are, what meaning they have to us, and how they fit in our own personal ledgers of value and the prioritisations of actions.

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