When money is limited, every purchase is a tradeoff. The question isn’t whether any gadgets you are considering are useful; it should be: Which gadget protects your wealth and adds more value in the long run? When funds are scarce for a period of time, the natural inclination for most people is to buy the thing that gives the most immediate pleasure.
Years ago, I once visited an old friend of mine who had just moved into a rented self-contained apartment. It had a very nice interior, newly painted, a new bed, mattress, and duvet that he told me he bought despite the heat because he was anticipating buying an AC, eventually. He had a new 50-inch TV complete with DSTV.
He even had one of those artificial green grass carpets customized for his room entrance. By the time I entered his kitchen, he had nothing to cook with, not an oven, grill cooker combo, not a camp gas, not even a stove. When I asked him why he didn’t have anything to cook with, he had the nerve to say he didn’t have money yet for that.
When I asked him how he ate, he said he bought food all the time. I was baffled at this at the time because this was someone who I knew was struggling and didn’t have a stable income. Apparently, he’d gotten a lump sum for his rent and some money for furnishing it from friends and family, and yet he picked the wrongest things to buy as home gadgets. What he prioritized was costing him more money in real time. He was bleeding money from having to buy food all the time when he could have just cooked if he had a stove. The little money he was getting was going to food and monthly DSTV subscriptions.
Predictably, a few months later, he stopped being able to afford the subscription and sold the TV to buy the very same camp gas he should have bought from the start. He could not afford to eat out constantly anymore. I guess he thought that because he was eating Buka food, he would not get tired of paying, but these expenses add up really fast.
Case Study: The Deep Freezer vs TV
It feels like common sense that my old friend should have bought a stove before a 50-inch TV, but unfortunately, common sense isn’t so common. But we mustn’t get cocky because these gaps in judgment can happen to the best of us. They come up as decisions in our lives in sneaky ways that we may not recognize.
In fact, the reason that I picked the TV versus deep freezer as a case study was because in my mid-twenties, I once bought a smart TV at a time when I didn’t even own a deep freezer. I’d lived without a TV for years, mostly because I was avoiding binge-watching as a distraction in my life. Eventually, I gave in one Christmas when I felt like I was going to be bored. The thing here, though, was that no one presented the TV side by side with a deep freezer for me to compare. And technically, I could have afforded to buy them both at the same time, but the crazy thing was that it never even crossed my mind to consider whether there was something else, other than the TV, that I could have bought at the time that would have added more value to my life and finances.
For this case study, we are going to briefly look at a hypothetical person who is buying gadgets for their home during a period of time in their life, where they have money for just one gadget, and they have to decide between a television and a deep freezer. So the big question here is, if the hypothetical person were applying critical reasoning, financial planning, long-term thinking, and cost-benefit analysis to this purchase, which one should they buy?
TV
Pros
- Entertainment
- Hosting Guests
- A put-together living room. The TV is usually at the heart of a living room.
Cons
- Electricity costs
- Initial cable installation costs
- Cable or streaming subscriptions
- Data
- Time sink
Deep Freezer
Pros
- Allows bulk buying of food at cheaper costs
- savings on cooking time and gas costs
- fewer market trips
- Potential business: iceblocks, selling cold drinks, and storing food that is for sale.
Cons
- Electricity costs
Verdict: Deep Freezer! When funds are tight, the deep freezer wins hands down. TV costs you more money in cable connection, streaming subscription (Netflix, Disney Plus, ShowMax), and data costs. But the deep freezer saves or potentially makes you more money outside of electricity costs. It’s not that you can’t ever pay for entertainment, but when funds are tight, it’s about prioritization.
People might try to brush the choice off with, “but I don’t cook, so the better choice for me is to buy the TV for entertainment”. This is a classic choice of image over self-preservation. If you don’t cook and your funds are scarce to the point where you have to pick between two gadgets instead of being able to buy them together at once, maybe that is a sign you should be cooking more to stretch your funds.
Maybe another way to frame it would have been to ask, is there any essential gadget that I’m better off buying that will give me more value for my money and save me money long term? The truth is, though, in real life, financial choices will rarely ever present themselves that neatly to you. When faced with similar choices, ask, What is the TV in my life, and what is the deep freezer? Apply it to other options like a laptop versus a game console, a gas cooker versus a microwave, etc. If I had asked myself that question when I bought my TV, I’m confident I would have bought the deep freezer before the TV, or at the very least, bought them at the same time.
My old friend should have done this: the money spent on buying and installing the DSTV cable should have and would have bought him a simple camp gas, if he didn’t want a combo cooker. The money spent on the 50-inch TV and TV stand could have easily bought him a refrigerator/mini deep freezer to preserve his meals, store raw food, and save him cooking time.
Or at the very least, he should have put it into a savings account or money market fund, earning him interest. His problem was that buying boring but cost-effective gadgets like a stove, fridge, or freezer was not cool to him, in the way buying a big flat-screen TV is. But the boring gadgets would have compounded in value over time. Meanwhile, the “image” gadgets like TV, sound system, and the game console have ongoing costs and very little return outside of entertainment, which gets old really fast.
Your takeaway: when money is scarce, it is tempting to buy for comfort or image, but the smart move is buying for value. Buy the gadgets that save you money or effort in the long run, not the ones that cost you more.