Hey, guys. It's Chelsea from
The Financial Diet. And this week's
video is sponsored by Haven Life Insurance Agency. And this week, I want to
talk about all of the things that our susceptible, malleable,
frankly dumb brains think are going to make
our lives better, make us feel richer
in our lives, really vastly improve our day-to-day
quality of life, just generally really be worth that extra
money, which are not. I will caveat that,
like with most things, there are some times when
things that could be perceived as frivolous do genuinely
pay dividends in your life and can really be worth it. But, for the most
part, these purchases are things that we have been
trained often through marketing or social perception
to feel have a higher value and a higher impact
on our day-to-day life than they really do. So even though you
still sometimes may end up making some
of these purchases, it's important to go into
them with a clear head and a full understanding
of why you're making them that does not include
unreasonable expectations. So without further ado-- 10 purchases you think will
improve your life but actually won't. Number one is items that
constantly necessitating buying parts or refills. And yes, this comes from my
own tragic, tormented personal journey with a SodaStream. And it's time to be real about
a SodaStream experience, which is that I got a SodaStream. I used up the
canisters it came with. I never replaced the
canisters for, like, months. And then I had a
brief renaissance, a SodaStream-sance. And I was feeling
very good about it. I was getting a lot
of use out of it. But then it just kind of
fell by the wayside again and proceeded to
live under my kitchen cabinets for several years until
I finally threw it away one day while moving. And there was a time if
you had caught me during, like, that SodaStream-sance
that I would have said, like, what a great purchase. I save money on
all the Pellegrino that I'm normally
drinking otherwise. But the truth is that if you
are not the kind of person who is responsible enough to
constantly be acquiring these refills, it's often going
to end up being more trouble than it's worth. And besides that, the
perception that these things are automatically a
better deal doesn't always play out in reality. Again, using the SodaStream
example, on Amazon, SodaStream sells
their branded syrup in bottles for $5
each, which claims to provide enough syrup
for 12 liters, which means you're paying $0.41
a liter for the syrup. So buying things at
this rate, you're spending $0.23 per liter for
the CO2 and $0.41 per liter for the syrup, adding to
a cost of $0.64 per liter. If you compare that to what
you can buy generic soda for-- about $0.40 a liter-- or name-brand soda
at $0.50 a liter, it's actually more expensive
to use the SodaStream. Aside from the fact that
these constant refills are bad for the environment,
inconvenient, and can often represent a much
higher cost per unit than just going out and
getting coffee grinds, these items take up really
valuable, precious space on our counters,
which, if you live in anything less than a really
big house, tends to matter. There are places and
times for these devices. The TFD office has
an espresso machine. I'll fully cop to it. Although, I will say, their
capsule recycling processes are a lot better than
Keurigs and we follow them to the letter. But in an office with
eight women and basically no counter space for
cleanup, dishes, et cetera, it does make the most sense. However, in a home kitchen,
easy to see the argument to the contrary. The point is, being very
lucid upfront about what these constant
refills might mean and only making the decision
when they really make sense is of the utmost importance. Number two is
expensive jewelry-- yes, including engagement rings. Now, this is where that
caveat that I mentioned when I came into this video
comes into play, especially if you're someone like me
who did make the choice to have an engagement ring. Now, I did get an engagement
ring that is all vintage. Everything was repurposed from
rings from, like, the 1920s or before. And I did design the ring
myself with my husband in collaboration
with our jeweler. But the point remains that I
did opt for a fancy engagement ring. So I'm no stranger to the fact
that sometimes these purchases can be worth it. For me, I'm someone who
literally basically only has that and a few
inherited pieces when it comes to fine jewelry. I just lose jewelry
way too frequently to invest any more in it. And that forgetfulness
with jewelry, by the way, comes into play in the fact
that my engagement and wedding rings are insured. But the important
distinction here to make is worth it versus
worth it to you, because many people operate
under the faulty assumption that diamonds and other fine
jewelry are investments. And honey, that is not true. There's a common myth
floating around out there that a diamond ring is
some type of investment. In the late 1800s, diamonds
did used to be pretty rare. But with the discovery of
substantial diamond sources in the second half
of the 20th century, diamonds became more
and more abundant. The only reason the price
has remained so high is that DeBeers has steadily
purchased all diamond mines across the globe in
order to control the prices. The monopoly did end in
2001, but we are still left with the aftermath. So, sure, get a piece
or two of fine jewelry if it makes sense to you. And if that item happens
to be an engagement ring, right there with you, honey. The point is, you should
never do this thinking that it's some kind of
good financial decision. Basically on every
level, if you're going to spend a few thousand
dollars on a fine piece of jewelry, you'd be
much better off putting that money in the market. But these items can
still be worth it to you. You just never want to
buy them under any kind of false assumption
or, god forbid, use some kind of mandatory
calculation about things like an engagement ring in terms
of how many months of salaries you need to be spending on it. A diamond is not an investment,
except maybe an investment in your heart. Number three is furniture that
is more stylish than well-made. And here is where I torpedo
my chances of ever getting a West Elm sponsorship. There are items in the frame
of this very video that are from West Elm, and I am
very disappointed by them. Like many of you guys,
in my mid to late 20's, I went through this phase
in my furniture, home decor, amenities lifestyle that I
was like, the tyranny of IKEA is over. I am upgrading to
more fancy furniture. Commensurate with my lifestyle. And it is in that
phase that I learned that just because items of
furniture are more expensive does not always correlate one
to one with higher quality. In fact, several of the items
that I've bought from West Elm-- I hate to say it-- have been way lower quality
than some of the items that I've had for years
from IKEA or other stores. I still think some of the stuff
they make is extremely cute, and I like the look of it. But when it comes to
furniture, especially if it's a wood item
or a leather item or something that's
going to serve a really heavy-duty purpose
over years and years, quality is of the
utmost importance. And that does not
always translate to the most trendy furniture
purveyor of any given moment. So what are some things to
look out for when shopping for investment furniture--
solid wood which will hold up for much longer than
MDF or wood veneer-- MDF, by the way, standing
for medium-density fiberboard board. And when looking
at the wood, you want to check for wood joined
at the ends and corners rather than glued or nailed in. You want to be buying
in colors you're very certain you won't get sick of. You want heavy, sturdy legs that
are jointed to sofas and chairs rather than just
nailed in, fabrics that are easy to
maintain and keep clean, and a general focus on a more
neutral, timeless design style. Learning what furniture
is and isn't worth it and getting in the practice of
using things like Craigslist, secondhand stores, Facebook
messaging boards, et cetera, to buy some of your
bigger ticket items is incredibly important
to finding a home with sustainable, quality goods
that isn't a million zillion dollars, because, trust me, when
I have looked before at some of the items that I see
on blogs or Instagram and fallen in love with,
I am truly shocked at how expensive things like
a good sofa or dining chairs or a mirror can get. And honestly, after all of
these years of ashuing it, I have come back
around to the fact that IKEA really gets
the job done, baby. And a lot of their stuff
is much higher quality than you would think. Number four is name brand over
generic foods or medications. If you were like me and grew up
in a less than rich household as a kid, nothing was
more coveted to you than the name-brand products. You didn't want that
crappy bagged cereal with the weird mascots. You wanted the Chex,
not the Crispy Hexagons. I remember when I would go
over to certain friends house and I would open their
cabinets and refrigerators and see everything name brand. Nothing felt more
luxurious to me. And, no surprise,
when I finally became an adult who was able to do
her own grocery shopping, I spent way more
money than I should have getting the
name-brand stuff because I subconsciously
associated with higher quality,
better taste, better ingredients, et cetera. But not only are many of
the generic and name brand foods made in the
same facilities by the same companies and simply
labeled differently-- even when they're not made to the
exact same standards, the perception of
quality that we tend to give to the name-brand
items is mostly placebo. In fact, in the many blind taste
tests research studies that have been conducted
throughout the years, consumers are almost
never able to tell the difference between
the store-brand and the brand-name products. And in some instances, the store
brand is actually preferred. And when it comes
to medications, there are strict
regulations about what medications must be
comprised of in order to fall under that name. When it comes to
quality and composition, brand name and generic
medicines are interchangeable, except for the huge
marketing budgets that go behind the
brand-name medications, which usually translates to a more
expensive sticker price. In fact, generic drugs are
copies of brand-name drugs that have exactly the same
dosage, intended use, effects, side effects, route of
administration, risks, safety, and strength as
the original drug. In other words, the
pharmacological effects are exactly the same as those of
their brand-name counterparts. And there you have it--
generic brand all the way. Number five is grown-up
clothing that you did not read the care instructions for. First of all, let's all
start off this point by being honest with ourselves
about the number of times that we have purchased
an item of clothing without carefully reading
the care instructions and making sure it was
something we could feasibly do and/or giving them a brief
glance and being like, it says dry clean
only, but it'll be fine in the washing machine. For me, that number
is quite high. And the cost of not properly
caring for a garment-- even if you can get away
with it for a little bit-- is very high when you consider
how much more rapidly improper care will lead a garment
to deteriorate, therefore, needing to be replaced. And when it comes to buying
dry-clean-only clothes, that can represent a huge cost. The cost will vary
depending on where you live. But generally you can expect
to pay at least $5 for shirts and $20 to $30 for
things like coats. Anecdotally, our Head
of Content, Holly, got her wedding dress dry
cleaned after the big day and it cost her $150. For context, my
whole wedding dress cost me $80, plus a
little tailoring-- so. Now, for most of us, it's
impossible to totally avoid some dry-cleaner,
hand-wash-only clothing. But too many of these items can
easily lead your laundry budget to shoot up by 10 times or more. Like with furniture,
take time to investigate the quality of an item as well
as the care and investment that it will require on your
part on an ongoing basis to maintain before
making the purchase. Number six is DIY
supplies for projects you did not follow through on. And I'm sure that
for most of us, after this whole
'rona quarantine, this is a more real
point than ever. I've been told that anecdotally
our Head of Content, holly, has a doll house
kit that has been sitting in her home for five plus
years, which is deeply creepy, honestly. Sorry, I'm getting word that
it has since been thrown away. But I think a good
rule for anything that requires an investment in
terms of materials or supplies or a full-blown kit, you
should have demonstrated some kind of
aptitude or capacity to maintain this habit before
making that investment, i.e. if you're someone who
does a lot of sketching and really takes it
seriously and wants to improve, sure, go ahead and
invest in a bunch of nicer art supplies. But if you're just
sitting around one day feeling like I heard
that podcast about how, like, coloring can
really help your brain, I think I'm just going to go
ahead and order this whole ass kit of pastels
from the internet, don't do that because those
pastels will likely just sit in a closet somewhere making
you feel bad about yourself. This is also a call-out
to my husband, who once bought himself a
trumpet and many music books to go along
with his trumpet, having never picked up an
instrument before in his life, tormented his roommate neighbors
for about a week with his, like, tooting and
then promptly had to sell it on
Craigslist years later after going untouched
for years and years. And beyond just
demonstrating that you have some kind of follow-through
with this activity, make sure that if you
do make the investment to buy some of these
supplies or materials that you dedicate
time in your schedule with which to use them. Buying supplies for
things, even things you might enjoy or are good
at, but not giving yourself a dedicated time to work
on this as you would any other important
project often will mean it just
consistently falls to the bottom of your
list and doesn't get done. We can often trick
ourselves into thinking that just the act of buying
the supplies or materials will give us almost an
equivalent value to actually following through
with the thing. But my nearly unused tap shoes
at the bottom of my wardrobe would beg to differ. Number seven is home skincare
that promises big results. I'm someone who
has dealt with acne and rosacea for her
entire life to varying levels of difficulty. When it comes to various
treatments, you name it, I've done it all the way up to,
like, serious medications that disrupt your day to
day life but promise to get rid of cystic acne. And as I recently
complained about on Twitter, in the past few weeks
of quarantine, mostly because I just want to sleep
more than anything else and get to the next
day on the calendar, I've been eating rather well. I don't drink most days. I drink tons of water. I work out more regularly
than I ever have. I get great nights of sleep. And my skin is still
completely messed up. I'm wearing makeup right now
if you think it looks OK. The other day, I had
a rosacea flare-up worse than I've seen in months. And I was like, all
of this is for not. All of you skin care gurus
out there who convinced me that with the right
routine at home and by drinking enough
water and eating clean and all that bullshit that
I would suddenly transform my face, it has not happened. And that is because the ultimate
truth of skincare is that, with a few exceptions-- and yes,
there are certain products that can make a really big
difference for specific elements of your skin-- the vast majority of what will
determine your skin's health are going to be
things like genetics and, frankly, the
amount of money you have to throw
at the problem. I'm someone who was
born with terrible skin. And nothing
demonstrates that better than my younger sister who,
despite never once in her life having anything that
could be described as a skincare
routine, has always had a pore-free,
blemish-free complexion, not that I'm bitter. I'm happy for her. That's her journey. I'm on mine. And that's the point. Most of the products that you
can buy for your home routine, they could make a
dent here or there, but they're not going
to transform your skin. And the things that will
are often quite involved and prohibitively
expensive, which brings to mind one of
my favorite articles ever by friend of TFD Amanda
Mull called "The Best Skincare Trick is Being Rich." She writes, "For example,
in a 2016 Elle magazine article surveying 17 Victoria's
Secret models, eight of them praised lifestyle habits such as
drinking water and exercising, with several more
crediting low-cost fixes such as drugstore pore strips. None of them
mentioned Mzia Shiman, who tends to the skincare needs
of Victoria's Secret models. The facials at her New
York spa start at $200, and more advanced services
offer tightening and plumping by an LED light in bed or
electric micro-current." The point is, investing
in home skincare products with the expectation
that they will transform your complexion is often
setting yourself up for massive disappointment. And I do personally
have a few products that I've deemed to be
worth it over the years. But, for the most part,
my skin every morning is just kind of a game
of Russian roulette. Wah, wah. Number eight is scammy weight
loss programs or supplements. If you often feel fatigued
by the sheer quantity of the medically
dubious weight loss promises that you see
flooding your social media, know that you are not alone. "The biggest complaint to
the Federal Trade Commission involves mass market
consumer fraud from overstated weight loss
ads, supplements, and products. More than 6.5 million
people reported getting fleeced while
trying to slim down." And when it comes to places like
Instagram, trying to crack down on all of the various snake
oil salesmanship happening is like trying to
nail Jell-O to a tree. It's just always going
to slip away from you. There's just so many
voices out there promoting these products and so
little way to define what is just
misleading marketing and what is out and out illegal. But if you are someone
who is currently trying to lose weight, they
can be incredibly tempting. I've been through reasonably
substantial weight loss in my life, losing about 25
pounds several years ago. And I'll be perfectly honest. During that time, I did
feel a little bit suckered in by some of these promises. I wanted to try some of
those, like, incredibly scammy gummy bears. But whether it's the
tummy tea that mostly just causes you to have the
runs or the weight loss gummy bears or the
protein supplements or the waist trainers that
are literally just, like, the corsets that women
fought for decades to free themselves from, like,
no matter what it is, generally speaking, when buying
these products, you're basically setting
yourself up for disappointment. Their effects will usually
be marginal at best, and none of them are going to
be replaced by long-term changes to lifestyle that
kind of are boring. A few key things
to watch out for-- tons of vague reviews
that ring fake, marketing words like "miracle product"
or "see results immediately," and free trial offers that
require your credit card information. Don't get suckered in by the
Instagram weight loss stuff. Love yourself. Number nine is high-end
workout clothes. So I won't name names here. We'll call this brand
Smoosh Mush Memon. And honestly, Smoosh
Mush Memon isn't even, like, the big one these days. With the proliferation of
direct-to-consumer marketing on social media, there
has been an explosion of overpriced workout clothes. I'm frankly bringing
it on myself by following a fair amount
of Pilates-related hashtags on Instagram, but
I am constantly inundated with advertisements
for $150 yoga pants. And yes, sure, some of them
are occasionally really cute. But in terms of the actual
difference they will make to your workout, as someone who
does Pilates quite regularly and has used both rather
high-end workout gear and the Old Navy
stuff, which is-- I must be honest, Old
Navy is the unspoken goat of the cheap but good
workout wear industry. There is no
substantial difference. It's not like with
running shoes where the right shoe and the right
fit can make such a huge impact on the quality of
your run as well as potentially the health of
your feet and legs and knees. The difference between a really
cute Instagram-approved workout outfit and something
that you just put on that you got from
the old man section of Hanes is nothing. But, honestly, kind of
similar to the skincare issue, the proliferation of those
incredibly bespoke, beautiful, aesthetically-inspired
workout clothes that cost a zillion dollars
and make no market difference is not that different
from the skincare hustle. It's all a part of that
ambiguous wellness industry that's more about conveying
class and status than it really is about physical
health or fitness. When you buy those really
expensive workout clothes, you're conveying
something about yourself more so than you're
doing anything to change the quality
of your workout. And sure, some
people might argue that having workout
clothes you feel cute in will make you more
likely to go to the gym. But, A, who the hell's going
to the gym any time soon, Miss 'Rona? And B, there are plenty
of cute workout clothes that don't cost that much money. Again, got to
shout out Old Navy. Lastly, number 10 is
the latest smartphone. Now, many of us do get caught
up in this cycle of feeling like the second a
new smartphone is announced we need to ditch our
old one and run out and get it. And our conspiracy
theory thoughts were confirmed
when Apple actually was found to be degrading
the quality of older phones when they released new ones to
encourage people to buy them. But it is so important
that we paradigm shift from automatically
assuming we need to replace our phone
to needing to prove to ourselves that we're
due for a replacement. And the standards that would
qualify for a replacement should be very high. The website whistleout.com
provides a pretty good checklist for knowing
when you actually need to be upgrading your phone. Does your phone handle
all your usual tasks without slowing
down or freezing up? Is it free of screen cracks
or other hardware damages that might affect its performance? Are you happy with the quality
of the pictures you can take with your phone's cameras? Can it support the
most recent version of its compatible
operating system? And can you use it often without
constantly having to charge it? If you answered a reasonable
yes to all of those questions-- and be honest-- then you don't need a new phone. It's inevitable that
sometimes we will end up replacing our technology. But given how high
of an investment so many of these
products are, the barrier to entry for getting a new one
should be much, much higher than, ooh, shiny new thing. Tune out the marketing. And honestly, wait for
that new smartphone to go way down in price. Well, we've talked a lot about
the purchases that don't really often hit the payoff
we expect for them. But one that quite
literally will any time you make it is the right
life insurance. And though you may not be
thinking of it as often as you do the new smartphone
you want to be buying, you absolutely should. Life insurance is one of the
most financially important products you'll buy
in your lifetime. Should anything
ever happen to you, a term life insurance
policy payout can help your family,
partner, or loved ones pay bills such as
mortgage payments and day-to-day expenses. And getting life insurance
doesn't have to be a pain. Haven Life is an innovative
startup backed and wholly owned by MassMutual that
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our description to get your term life insurance
quote and apply online. As always, guys, thank
you so much for watching. And don't forget to hit
the Subscribe button and to come back every
Monday, Tuesday and Thursday for new and awesome videos. Goodbye.
