What do you consider to be a lot of money these days?
Money is relative to what we could / want to purchase these days
Of course it depends on the item – you wouldn’t pay $100 for a candy bar (or would you!?), but you’d pay $1000 for a secondhand, dirt cheap, car.
I remember thinking $20 was A LOT OF MONEY when I was a child. I knew $20 could buy about 15 candy bars with some money leftover, so I calculated “a lot of money” as “how many candy bars can I buy with it?”
These days, as I am not buying candy bars, and I am more into the realm of secondhand designer clothing, I pause at something that is $50 to $100 secondhand, and anything above that (in the thousands let’s say), makes me ponder over the purchase for at least 3 days.
We also consider amounts of being ‘expensive’ relative to our income
Obviously, right? The more money we make, the less stressed we are about spending $20 on something, and our spending can go up to $50 or $100 before we have the same feeling of scarcity or stress. If you are always living on the edge of income and your budget, and you have no room, or very little, you will be less likely to just randomly spend on a $20 item because every $20 COUNTS.
Our brains now see the opportunity cost
Anything at $20, I would just click into a basket and buy (taking into account shipping costs of course), but with the full awareness that $20 x 10 items, adds up pretty quickly. My brain weighs between the “what am I getting for this money” value part, and the amount I am shelling out for. I see the opportunity cost of “if I buy this coat for $250, this means I can’t justify buying this other coat for $110. Which one do I want more?”
Other considerations are the product and its rarity
I also consider the desirability in the product and its rarity. If it’s candy bars, I don’t bother really stressing over buying the EXACT candy bar I want, because I know they’ll just make more and there’s tons of supply. But if I come across a piece of clothing or jewellery I have been HUNTING for a while, and I see it for a relatively good price (lower than retail, that is), my brain gathers or stores information of what the average prices have been over the time I have been looking for it, and then factors in how much I really want it.
All of these things, can let me justify a higher price (I mean, once I get over the actual cost itself).
For instance, I have wanted a Max Mara Manuela coat for a while now, and I am seeing that secondhand, it goes for about $1000 – $1500 CAD. I cannot justify that because I already have so many lovely coats (for one thing), but also that I am not THAT MUCH in love with the coat that I can pay that right now, even though at retail, it is closer to $5000 CAD.
If however, I was in a store and I saw it secondhand for $500, I’d snap it up immediately, because my brain KNOWS it is $1000 – $1500 secondhand, and it sees the deal for something I have (low key) craved for years, but have never been able to pull the trigger on.
Secondhand Max Mara coats, don’t grow on trees for cheap, whereas candy bars are a constant.