What Does Money Well Spent Even Mean?

We just came across a situation that made us question if there is a way you can evaluate the value of how someone spends their money. And we believe that the only way to do so is to measure how happy someone is after they spend it. This then leads us to believe that the real value of someone’s investment does not only lie in the financials, but also in personal satisfaction. I understand that objectively, we can use economic criterion to judge financial sense, but it does not give us the whole picture. 

Simply put, if the value or utility an individual receives is greater than the opposing opportunity cost, then the money would be well spent. 

Let us take someone who outsources their laundry and house cleaning. There is a cash outlay that is involved. However, for someone who pays for this service, the time they get in return is, for them, worth the investment. In other cases, some people would justify that the monetary savings are worth the time that is needed to perform the action. So whether something is worth it or not is relative. And this goes beyond financials.

If we take a quick step back and use the person who outsources their laundry and house cleaning, they might justify the time they save in their chores by using it to spend it with their family,  or themselves like continuing education. This in turn would make them to believe that the fulfillment they get in those experiences is worth paying the service. 

There is no hard truth formula that can measure overall utility. We can attempt to do so, but there are assumptions that would always make it subjective. And at the end of the day, it would always be subject to the particular person on how they feel they should spend their money. So the challenge for our society is to not quickly judge on how someone spends their money, because we do not know the overall utility they receive from it. There are always justifications, and if it is the right one, then sometimes the financials are not enough to explain whether the money is well worth it or not.