Wednesday, January 19, 2011

Thrift Week, day three: Avarice

Continuing our ongoing Thrift Week parade of sins, today we come to the topic of avarice. This one may seem a little counterintuitive: sure, being too fond of money can hurt you in a variety of ways, but how exactly can it hurt you financially? Won't piling up your money invariably make you richer? Well, no, not necessarily. There are actually lots of ways in which being too attached to your money can actually hurt you. Let's look at a few examples, which we'll illustrate with a character we'll call...let's see...Bill.
  • Bill's car starts making a funny squealing noise. He hesitates to take it to the mechanic, because he doesn't want to spend the money to have it looked at when it might be nothing. (Deep down, he's even more reluctant to have it looked at and find out it really is something—something that's going to cost a bundle to fix.) So he just ignores it and hopes it goes away, and one day it does—only to be replaced by a horrible grinding noise that turns out to be the scraping of the metal plates in his brakes, forming the percussion line to the tune of hundreds of dollars in repairs. If he'd attended to the problem early on, he could have just replaced the brake pads; now he'll have to repair the rotors as well.
  • Bill has a huge old dinosaur of a refrigerator that positively guzzles electricity. He's thought about replacing it, but when he looks at the price of a new one, he turns pale at the thought of shelling out seven or eight hundred dollars all at once. So instead, he just keeps shelling out 15 extra dollars each month on his electricity bill, even though the energy savings on a new fridge would be enough to pay for it in just a few years.
  • Bill hears about a hot new stock that's sure to take off. He promptly puts every penny he's got into it and loses his shirt when the stock tanks.
These are just a few examples; once you start thinking about it, you can come up with lots more. Bill's problem is that his eagerness to make as much money as possible, and his unwillingness to part with what he's got, isn't tempered by rational judgment. There's nothing wrong with wanting not to spend money when you don't have to; it's only a problem if you blindly hold on to your cash without stopping to think about whether it's really in your interest to do so. Sometimes, refusing to spend money now will just cost you more later; in other cases, spending the money will bring you other benefits that are really worthwhile, even if they can't be measured in dollars and cents. (Giving to charity is one example; spending money on something you truly love to do could be another.) To put it another way: the difference between being financially savvy and being greedy is whether you're controlling your money or it's controlling you.

Am I just stating the obvious here? Well, perhaps. But the obvious can be worth stating sometimes, I think. Anyhow, tomorrow I'll see if I can come up with any more interesting observations on the subject of wrath.
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