Yahoo Finance How to Know Whether You Should Go Ahead and Spend Money on That Travel Experience
Self-styled “happiness gurus” have long been preaching the fact that spending money on experiences yields more satisfaction than spending money on stuff. Presumably, this means that spending that $200 on yoga classes instead of a new pair of shoes should in the long run yield more satisfaction. However, as with every nugget of wisdom, you need to use your brain before adopting it wholesale.
If you’re spending a million dollars on champagne-drenched yachting trips every weekend or paying your personal trainer $5,000 a session just because he was a body-double in Terminator, you probably need to take it easy and realise that you’re going absolutely nuts. Here are some questions to ask yourself before whipping out your wallet.
Is it an experience you are really interested in?
The problem with spending on experiences is that there are usually other people who will be sharing them with you. And when other people get involved, our judgment gets clouded. If all your friends are on board with the plan to spend the next 24 hours gambling at the Marina Bay Sands casino, even if your idea of gambling is playing Bingo, you get swept up in the moment and the next thing you know, you’ve remortgaged your house to pay for that evening at the baccarat table.
Of course, if you hum and haw each time your friends ask you to go out for an 80 cent kopi, you’re going to find yourself friendless pretty quickly. The trick is to have a maximum budget in your mind. Any activities that fall under this budget get the green light. But when prices go above the budget, you need to assess whether you’re about to partake in an experience that you’re genuinely interested in, or whether you’re just going along with the crowd.
Is the price reasonable?
No matter how badly you want to dive with bloodthirsty sharks or bungee jump to certain death, there’s no such thing as “no holds barred” when it comes to expenses. Whenever you are faced with an experience you’d like to pay for, always ask yourself whether the price is reasonable.
One obstacle is that you can’t just do a simple price comparison across different providers as you would if you were going to buy a Samsung flatscreen TV. The whole idea of experiences is that each one is different, in theory anyway.
Your best bet is probably to do research on what the average price for similar experiences is so you don’t get ripped off, and then to read individual reviews to pick a provider who’s right for you. For instance, the quality of piano teachers varies quite wildly, but unless you’re looking at becoming a professional pianist, you probably don’t want to pay $200 an hour to be taught by some maestro.
Is there a cheaper way to do it?
So you really, really want to try that fake skydiving thing at Sentosa and according to your calculations the price is market rate. But still, if you’re creative enough, you might find a cheaper way to do it, perhaps with a really strong vacuum cleaner and a partner in crime. People are often quick to pay for the “standard” option on the market when a bit of resourcefulness can save tons of money.
Anyone who’s ever travelled for an extended period knows that there’s a huge price difference between mid-range travel and budget travel. If you really want to see Ayer’s Rock in Australia, you can either backpack your way across the continent and share transport with fellow travellers, or you can go luxury safari-style.
Getting ripped could mean a pricey gym membership complete with personal trainer, or it could be you sweating it out at the government’s $2.50 per entry ClubFITT gyms. I have friends who’ve spent thousands of dollars on courses for anything from cooking to roller blading, when these are all skills that many 10 year old kids have successfully picked up on their own.
What kinds of experiences do you spend money on? Tell us in the comments!
The post How to Know Whether You Should Go Ahead and Spend Money on That Travel Experience appeared first on the MoneySmart blog.
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