The short and long story of value for money
Each of us uses a very different way of measuring value for money, depending on our perspective.
However, most of our buying decisions end up something like his – we decide a budget and buy the product that fits, or we use another similar product as a reference point and accordingly estimate the relative value of what we are looking at. Which means that either we would be looking for the best bookshelf speakers under Rs 15,000 because that’s the intended budget, or decide that it’s all right to “spend 20% more” for another model that’s rated highly.
These are reasonably reliable ways of estimating value at a certain point of time – when we are in the act of buying or deciding what to buy. But if you look at your buying decisions in retrospect, things often look very different.
When you evaluate the cost of a product over the useful lifetime of the product (for you), the value that you see can look very different.
As an example, paying Rs 75,000 for a LCD TV or a Home projector may seem like a LOT, but when viewing it over time, this comes to Rs 20K a year (over 5 years) which is typically how long a TV retains its utility. If you are using an EMI model of calculating you can call this “JUST RS 1,700 PER MONTH”
That doesn’t sound so bad, does it? It actually isn’t.
Looking back at what we think are some of our best buying decisions, reveal an interesting trend. The products that meet our needs well for a longer period of time seem like the better investments we made. A computer monitor costing 10K over 8 years is just Rs 1,250 per year (AMAZING value); an AV receiver costing 35K over 8 years is less than Rs 4,400 per year, and a good set of headphones costing Rs 4000 that meet your need every day for 5 years is less than Rs 800 a year and so on.
Which is something that we know at the back of our minds, but often forget to factor in when making our buying decisions.
So remember to ask yourself “how long is this going to meet my needs WELL”, when you are evaluating the value of an investment of any device or gadget. It’s a simpler way to achieve better value.
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