The Difference Between Spending and Buying

I could spend $60 on a pair of pants, or I could buy that same pair of pants for a dollar.  I'm assigning arbitrary distinctions to these two monetary transactions, but for me the difference is very real.

I see spending as an entertainment, a journey about the relatively dull thrill of being The Customer.  Spending is what you do when you "go shopping" (yes, I'm using that term here very much on purpose); there aren't necessarily any objects you lack, or experiences you've always wanted to do.  You just happen have a wad of what my homeless friend Dan used to call "Fun Coupons".  Spending them breaks up the boredom.  You spend money on a line of coke, and it makes you feel like your standing on a mountain.  Then, of course comes the falling-off-the mountain part (ouch).  In contrast, actually standing on a mountain takes some planning, conditioning, etc.  You have to think about it, and therein lies the difference. 

Similarly, spending $60 for the pants somehow makes them more sexy, and elevates you into the class of people who can spend $60 for a pair of pants.  In some inexplicable way, they are worth as much to you as sixty pairs of pants that have been worn less than ten times each.

If your aim is to stimulate the economy, now is a great time to be spending money.  The pants disappear from the shelves, and someone gets paid to sew a replacement.  Boats and trains and trucks are employed to ship another pair of pants all the way from (America's ally in the fight against terrorism) Pakistan.  Dancers and writers and graphic artists contrive miniature dramas that extoll the virtues of the pants, which will also prompt your friends to say "Nice pants."  Taxes are collected.  You could also buy cocaine, and except for the advertising and taxes, the stimulus to the seller and the economy are basically the same.

Buying though.  To me buying is more of a process.  We think about whether or not to buy something.  For example, I've been kicking around buying a computer.  Mine's dead; I've been using Janie's.  My computer needs to have the ability to do a search-and-replace on a Word table with 5,000 lines.  It should be able to sort a Word table with 12,000 lines without crashing.  I already have a keyboard, monitor and screen. I only need the "tower", and I want it to cost me $300 or less.  I'd like a second screen and I'd like to have someone come to my home, hook up the new tower and screen, transfer my old files, install the dual screen software and coach me on things to look out for. Maybe I'd be willing to pay $450 for this.  Or maybe I'll pass.  I haven't yet calculated the full opportunity cost of not buying something even more useful.

If the buyer comes out ahead, it's a buy.  If the seller comes out ahead, we're looking at spending.  Right now is a great time to buy.  You've heard of a "buyer's market"?  This is it.  In fact, wait 18 months and the buying will be even better.

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Dinner out because it's Friday - spending.

Gas for your 40-mile commute - spending.

A new Escalade with $5,000 cash back - spending.

Buy a Hummer and get your second Hummer free - spending.

Buy one Hummer - any Hummer - spending.

A Toyota that gets 14 miles per gallon and zero interest for 3 years - spending.

No.

Wait for that "vacant" lot with an obvious tear-down house to drop to $80,000.  Buy it.  Fix up the house.  Move in.

Walk into Wal-mart.  Buy the two-pound can of cashews featured in the ad for $6.49 and walk out.

Make a list of things you really need.  Wait until spring and start going to yard sales looking specifically for those things.  Dresser for $10.  Sold.  Turntable for $5.  Sold.  Three new pairs of pants.  $1 each.  Sold.

Watch the stock market for companies that know not to do business on borrowed money (in other words "low-debt").  Only look at companies where you can understand how it is they make money.  Look in Valueline and see if it's rated a 1 or 2.  Wait for one of those panic days when the market goes down 8 percent.  If the stock for your company bucks the trend and goes up a little,  buy it.

Need a new car?  Save up $10,000 and buy no car that costs even a penny more.  Drive it for 200,000 miles.  Or buy an inexpensive used car from a clueless but honest friend who thinks he needs a new car.

Need a truck?  Buy a used Chevy, Datsun or Toyota truck built in the late 60s or early 70s.  Pay no more than $1,000. 

The more general rule here is that you buy only things you need, and you think hard and long before you buy it.   If necessary, you look at yourself in the mirror and ask, "If I spend what they're asking, will they see me exit the door and say to themselves 'Wow.  Ha.  Ha ha.  Ha ha ha ha ha ha ha."

"High five."

(smack)