PENNY WISE AND POUND FOOLISH: MY HULU BLUNDER
About 6 years ago, as I was partway into my career in trading, I was also partway into my understanding of personal finance. I had always had a strong bent toward frugality (thanks Dad), and I knew why I was saving (to provide for my retirement), but I tended a bit too much toward saving and a bit too little toward remaining cognizant of?why?I was saving in the first place.
The Dork in Me
I love Survivor. Please don’t stop reading.
I used to think my wife was a huge dork for liking a show I had stopped watching before I went through puberty. Then her incessant “Don’t knock it 'til you try it” attitude wore me down. I agreed to give it a try. And that was the end of my dignity.
Fast forward: my wife and I are on vacation in Florida, and we have a fever. And the only cure is watching Survivor (we weren’t actually sick). It was available on Hulu Plus, so we splurged and got a monthly membership. They had two options: $8/month with ads, or $12/month without ads.
What would you choose?
My Choice
Ben circa 2015 was no dummy. “Hah, like I’m paying an extra $4 a month when I don’t have to!” I was laughing all the way to the bank. But, if you read the title of this post, you know that I’ve since had a change of heart.
Yes, I should have known by the 50th repetition of the Sabra farmers singing to their crops that it wasn’t worth it. But I’m too much of a nerd to let my conclusion stop there. I need?data.
Why I Was Wrong
I was on vacation. My hard-earned time off, relaxing in the Sunshine State with my wife. And I was watching ads. Not only that, but during that year I was making around $100/hr after taxes at a job that I was fine with, but didn’t love.
Let’s run the numbers. I was selling my time to my employer for $100/hr, and I didn’t pop for the extra $4 to skip ads for a month of Hulu. Throughout one 13-episode season of Survivor (14 if you include the reunion show – and we?always?do), that’s roughly an hour of singing farmers.
I had sold an hour of my most precious time. For $4.
Only Fools Fall in Love
When I fell head over heels for fiscal responsibility (apologies to my wife if she’s reading this), step one of my commitment was avoiding unnecessary spending. But in the process, I took a heuristic and put it on a pedestal to worship it for its own sake.
While avoiding unnecessary spending is a great rule of thumb for those trying to get their finances under control, there is such a thing as being penny wise and pound foolish. If we put on our blinders and follow the heuristic without evaluating whether it is appropriate for the situation at hand, we risk making the wrong decision in a big way.
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A Measured Approach
I had the right mentality for much of the rest of my vacation. That mentality was: “We’re going to splurge and indulge ourselves with things that we don’t normally do because we’re on vacation.” Why not go buck wild on the chain restaurant Olympics (Chili’s, Outback, Applebee’s, Bonefish, need I say more? We were near Naples, the blue-hair capital of the USA, had to make the most of it).
But when it came to bumping up the subscription, I just couldn’t do it. I was missing the forest for the trees. In this instance, I needed to ditch the heuristic and remember why I’m saving money in the first place: to maximize my well-spent time.
Watching ads is NOT well-spent time.
“It’s Not a Big Deal”
So what? I only wasted an hour of my vacation (assuming we only watched one season for the sake of argument…). But there is something more sinister at work here. Am I beating myself up too much about this? Probably. But let me justify myself.
The reason this decision irks me so much in hindsight is that I was letting the method get in the way of the goal itself. I had a perfectly good opportunity to buy an hour of vacation with my amazing wife for $4, and I didn’t take it.
Call me a catastrophist, but that has to make a guy like me wonder what other opportunities he is missing because he is too cheap to buy what matters most (at a screaming good price, no less).
It took me a long time to realize that not all spending is evil. This is particularly true when we’re spending to guard our health.
Don’t Be So Dramatic
Peace of mind is a valuable thing, and our attention is something we owe it to ourselves to guard jealously. No, it’s not a huge deal if I was not-so-subliminally nudged in the direction of buying Sabra hummus. But it is a big deal that I rented my brain out to an embarrassingly low bidder, when that time could have been spent out on the lanai with my soul mate.
I forewent a golden opportunity to improve my life by investing in the relationship that is now the cornerstone of my family to save $4. If that’s not an unhealthy decision, I don’t know what is.
Recentering
Alright, let’s come back down to Earth. It is not the end of the world to make a foolish choice with good intentions. My intentions with this post, however, are to encourage all of you to take a step back once in awhile and consider not only the ways you can spend a little less money to improve your life, but also the ways you can spend a little more money to improve your life.
Stand ready to invest in your health and the health of your relationships. Those dividends are better than any you’ll get in the market.
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This was originally posted at: ChroniFI | Blog