4 ms·
A one-time $1k splurge is less expensive than a new $10/mo habit as long as it really is one time - the whole Diderot Effect thing helping us to think about why
by MandieD 4y ago
A one-time $1k splurge is less expensive than a new $10/mo habit as long as it really is one time - the whole Diderot Effect thing helping us to think about why the splurge might not be as bounded as we’d hoped, though.
I try to think of recurring expenses in terms of how much capital it would take to fund them in perpetuity (because I may well live another 50 years!), at 3% interest.
That $10/month subscription? $120/yr, or $4,000.
That’s not at all guaranteed to support the expense forever, but I find it’s a useful way to think about little recurring expenses before they add up out of control.
- ginko 4y agoA one-time expense also has an opportunity cost though. If you invested your $1000 with an average 4% yearly gain it'd be $4800 after those 50 years. (but then of course the same opportunity cost also applies to your monthly payments)
- hgsgm 4y agoAlso you switched 3% to 4%. (And for inflation of the subscription, I assume theae are after-inflatiom rates)
- noduerme 4y agoI kind of sweep through those small $10/mo subscriptions once a year with a sponge, as if cleaning the shower. They tend to attach like barnacles. It's good to sit down with your credit card bills and have an overall review of, e.g. "did HBO MAX actually provide me with $160 worth of entertainment?" If you remember $160 is ten burrito supremos, you think one way (i.e. HBO sucks). If you realize it's half an hour with a methed out hooker in Florida you think another way (i.e. Last Of Us was way better and lasted a lot longer). The point is, y'know, to think about it once in awhile so you're not some asshole just dumping money. I'm joking about all that, if you can't tell. But... Fuck people who say that counting pennies makes you cheap. Those are the people who'll never be rich.