Kuta Beach

Kuta Beach

Saturday, 2 January 2010

The Slippery Slope of Spending

At work I often spend $5 to $10 eating out during lunch. One day while I was walking around the city with a friend, we walked by a store that sold business shirts. He recommended to me that I buy what he thought was a good-looking business shirt. I told him I didn't want to buy the business shirt. He said, "You spend money on eating out, so why not spend money on business shirts?"

The problem with this argument is that it can lead to a slippery slope that can result in your savings rate dropping to zero. If you spend money on business shirts, why not spend money on shoes? If you spend money on shoes, why not spend money on wine? If you spend money on wine, why not spend money on gambling? By following this line of reasoning, you lead to a situation where you end up buying everything and therefore end up saving nothing.

Whenever a friend tempts you into spending money on something, just tell them honestly that you have a savings goal and that you cannot use the slippery slope argument.

No comments: