The general consensus about saving money by borrowing Buffy DVDs (or similar things) is that we’re not really saving money–we wouldn’t have spent it if we’d had to–but that we’re increasing our standard of living for free. I think that’s a good assessment.
When I was writing about it last night, I was actually thinking about how Enron did its earnings, according to Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (aff). Now I read it a while ago, but if I remember right, one of their accounting techniques was to count future income as actually earned.
If someone has a great idea, then they get credit and bonuses for it now–and the amount it’s projected to earn is added to the company’s earnings report.
In the same way, if I choose to count everything I don’t spend as savings then I’ve got billions of dollars saved. I have bought neither a house, nor a second house, nor a yacht, nor a corporation, nor a Tivo, nor even a car. And I’ve been saving money like this since I was a baby.
That sort of mental accounting can make us feel really good, really successful. If we’re trying to be frugal, sometimes it’s nice to look at the big picture and see all the things we might have wanted that we chose not to get into debt over. But in the same way not buying expensive lattes doesn’t actually save me $5/day (because I never did buy them daily or weekly), there aren’t actual savings.
Most importantly, I shouldn’t spend money to reward myself for not having spend $200 on the Buffy set. If I want to reward myself, it should be for any money earned in a month and put in savings at the end of the month.
At some point soon, I’m going to write about something else Micah mentioned last month–that some people have suggested Americans should get a future tax cut instead of this $800 rebate. They think that knowing they’ll pay less in taxes later may inspire people to feel richer and spend more now. Great.