1923: The Spending of Money

I participated in a yard sale this weekend with some friends. In addition to parting with some household things that had piled up the basement, I sold some Miss Abigail books, gave away a bunch of promo postcards, and talked to many friendly folks about the book and Web site.

The three participating households were particularly struck by the number of items in our sale that were of the following three categories:

1) Things we should have returned but never got around to it (mostly hardware store items, mostly mine)
2) Things purchased at thrift stores in the heat of the moment. By the time of the yard sale “What was I thinking?” was a more appropriate sentiment (I had a lot of these too)
3) Unused wedding gifts (apparently no-one else wanted Liz and Neil’s crystal either, it never sold)

With this all this spending and buying in mind, I thought a little something about the spending of money might be fun to read about. This is from C. W. Taber’s Economics of the Family (J.B. Lippincott, 1923):

It is a mistake to feel that people always spend money as they please and for the things that they really want. To a very great extent money is spent and purchases are made because the consumer or money-spender is influenced in some way and the expenditure is a result of habit or convention rather than the result of a want or need that should be satisfied. . . . Clever advertising usually brings buyers and it is hardly believable that all such persons are really in need of the article advertised. There are organized and effective influences which exist for the purpose of inducing once to spend money ~ and it may be foolishly. Society is met by an army of trained salesmen with pleasing personality and plausible statements, confronted by attractive display windows, sign boards, circulars, advertisements, beautiful catalogues and special sales ~ all designed to influence the spending of money. Few persons are trained to resist this array of organized forces skilled in salesmanship. Many people save money only to spend it foolishly at a later time. Effective sales forces often succeed in wasting savings, earnings, investments, Liberty Bonds, and even the money received from insurance policies. Money spent should mean money value received in return. These sales forces are not to be deprecated entirely, but we must use them, not to be lead by them. The following tests may well be applied to proposed expenditures:
1) Do I need the article or service?
2) Can I afford to buy it?
3) Is the quality good?
4) Is the price reasonable?
5) Does my income warrant this purchase at this time?

I suppose I should be rational and apply this test to my current want: the new MacBook!