Jan 22, 2009

Do you really value financial security?

Here's a hypothetical: Finances are tight but your cell phone is broken. You call your service provider and they tell you, "Oh yeah, that phone is known for always breaking. But good news! It's under warranty so we'll send you a new one for free."

Assume for purposes of this exercise that your livelihood does not require a reliable cell phone. Do you respond:
(A) "Great - send it ASAP!" or
(B) "Gosh, I can't live with an unreliable cell phone for even a minute even if I only use it socially. Let me spend money on a new one instead."

Not surprisingly, I would choose (A), especially if each new phone came with its own (new) warranty, so that if the new phone broke, I'd simply get yet another replacement for free. Obviously, it would be a hassle, but if money is truly tight, I can live without my phone for a few days. And I might not have to, since I could (probably) get a replacement at my service provider's store.

Do you know anyone who would choose (B)? I do.

And I just don't get it. I mean, I understand that a cell phone is important, but if I'm worried about being able to pay my bills, I'm not choosing to spend money on a new cell phone when I don't have to.

When I was reflecting on my friend's choice, I realized that it all comes down to priorities. And some people value other things over financial security, stability and independence. It may be status, or it may be safety. It may simply be denial – a sense of "I'm worth it, no matter what my true financial state."

Since it's a new year, when people traditionally establish goals for the next twelve months, I ask you:

Is financial security truly a priority? And if so, do you act in accordance with that priority?


Anonymous said...

I would answer yes, but I am generally pretty tight with my dollar even when I do not feel financial insecurity. When my cell phone broke a few years ago and I looked into replacing it I did not even want to wait for a rebate and I went with a less then $10 go phone that I just swaped out my SIM card in and that lasted me a few years. LOL! You are totally correct that it boils down to priorities. Great post.

Anonymous said...

I have Sprint and I've been with them forever, so while not the point of your post, I get a new phone for free every year. I would take the replacement and then change phones when the time rolled around for a new one. That's just me, because like you, I value financial security. I don't like not knowing how and when I'll be able to pay my bills.

But, I do know people like what you've mentioned. As a matter of fact, a friend of mine paid to terminate her contract so she could switch to AT&T for the iPhone. Then, she paid $300 for that phone. Completely ridiculous, but she just had to have it. Her priorities were definitely not on financial security.

Slinky said...

I do value financial security very highly, but there are occasions when it takes the backseat. My car was one of them. I valued the security of having a new reliable car rather then fixing my 17 year old clunker. But I have worked myself into a position where I can manage it, by not picking option B most of the time. :)

Unknown said...

I'm not sure I agree with OGWH [our gracious web Hostess :) ] on this issue. If the phone is known to be unreliable and you're pretty sure the replacement you're getting for free will share a similar fate within a short period of time, then it's just more non-biodegradable crap going into a landfill, or on a slowboat to Asia for starvation-wage workers to disassemble. You can't even give that phone like that to charity.

In this case, paying to replace it with something of higher quality may be the better choice. It might be a throwaway freebie to us, but somebody somewhere down the line is going to pay for it.