When you set out to make a purchase, but substitute it for something less expensive, did you just “save” money?
We can easily imagine two timelines: one when you bought the expensive car, and one where you bought the cheaper car. Maybe you just borrowed less money to pay for that car. What happened to the difference? Did your future self just get a payday?
| car purchase | bank balance | loan balance | "saved" | comment |
|---|---|---|---|---|
| spent less than expected | ||||
| - | base case | |||
| "saved" by borrowing more |
Let’s call that an imaginary dollar value. It only exists in our imagination, but it could have been spent. It’s the imaginary transaction of dollars not being spent, the spending equivalent of a tree falling in the woods with no one around to hear it. This imaginary number falls into a conceptual void. A loan brings money in from the future, further obfuscating your current financial reality.
We need wisdom to learn how to handle this imaginary dollar value. Without wisdom we become vulnerable to what has recently been popularized as Girl Math. Gendered language aside, everyone is vulnerable to this kind of thinking.
How much better to get wisdom than gold! To get understanding is to be chosen rather than silver.
Proverbs 16:16
When the money is controlling us, it tends to get spent. If you can recognize it’s less a question about numbers and more about psychology, and what your priorities in life are, you stand a chance at sorting yourself out.