A useful framework for buying things

09 Aug 2022

People in my life are often perplexed by how I spend money.

They wonder why I splurge on some things while being exceedingly frugal on others. How does it make any sense that I’d spend more on a coffee bean grinder than on my phone? There seems to be no rhyme or reason to my spending patterns, at least from their view.

To me, however, this can all be explained by a framework I have for buying things: I believe that each thing I own calls me towards doing more of certain actions (and away from others), so how much I’m willing to spend on something ought to be proportional to how much I value its associated actions.

OK, that sounds abstract, so let’s illustrate the principle with the phone example: I primarily see the smartphone as a distraction and temptation device. The activities it steers me towards (it’s easy to confirm this by looking at your iOS Screen Time)—texting, social media, etc.— are mostly things I want to do less of. That’s why I’ll always opt for the “good enough” phone over the newest and best phone.¹

Whereas my phone is a consumption device, I view my computer as a production device. It helps me make things, whether that’s code, writing, or something else. So I always get the best laptop I can afford.²

With this framework in mind, it becomes really easy to decide where I’m going to spend vs. save money.

A fancy / expensive TV in the living room is just going to make me watch more TV, which is not what I want, so I choose not to own one.

On the other hand, I have a relatively high budget for things that either make me more productive (i.e. tools) or promote more quality leisure. I get high quality kitchen gear, even though they can be rather pricey, because I want to cook more. Same goes for sports equipment, because I want to be more active. While I harbour no illusions that a pair of expensive running shoes will help me run any faster, so long as they make me want to go on more runs, then they’re well worth the extra dollar to me.

In general, I err on the side of minimalism and frugality because I agree with Sam Altman's advice that keeping your personal burn rate low gives you more opportunities in life.³

Except books. I have an unlimited budget for books.

The key takeaway from all this is to be intentional about aligning your spending with your values. Everything you own owns a part of you. Each purchase is a vote for the type of person you want to be.

Shop accordingly.