Penny Wise Pound Foolish – Financial Management Advice

Have you ever had the experience of doing something to save a few dollars and end up spending more? A wise men once said: “Penny wise Pound foolish”.

It is so easy to say that to another, but with the economic tsunami around us, it is so easy to fall into this trap. A family member decided that he is going to be prudent and opted to buy less expensive working shoes. The result, his feet hurt tremendously and he went out to buy a slightly more expensive pair and it broke after one month of walking.

I asked a curious question; “In the past, did you have a pair of shoes that you are most comfortable in?”

“Yes, it was Brand XYZ but it is pretty expensive but it lasted for a while…”

“Ok, if you add the prices of all the pairs of shoes you have bought in the last 3 months, how does that compare to this pair of XYZ shoes?”

“Of course, they cost more than the pair of XYZ.” followed by a sheepish look.

Here was the financial expert in the family, but yet in his mathematical calculation, he has forgotten about the value of ownership. If we look at everything at cost level, it really doesn’t makes much sense because cost is an expenditure and once expended…” Poof” … its gone.

Whereas if we look at something from a value of ownership perspective, we may make very different purchasing decision.

In what areas are you being penny wise pound foolish? How is that decision hurting you and depleting the value you should be getting from your purchase?

What other areas in your life can you see to increase the value of ownership?

Borrowing a Cantonese saying that my mother taught me” “贵买平用“。

Which loosely translates to if you buy quality and higher price goods, the cost of usage is lower as you can use it for a log time.

Thanks for coming along to my learnings from life.

Wishing you blessed abundance,

Felicia

felicia@imotiva.com