Elizabeth thinks it's fine to pay $100 for a bottle of wine if you want to and it's budgeted, but her coworker says no way. Dave says Elizabeth is correct with a caveat.
QUESTION: Elizabeth in Texas and her husband are debt-free except their house. She thinks it’s fine to pay $100 for a bottle of wine if you want to and it’s budgeted, but her coworker says no way. Dave says Elizabeth is correct with a caveat.
ANSWER: You win the bet. You should be able to do it, but there is a caveat. If you make $22,000 a year, then a $100 bottle of wine is a little bit weird. If you make $1 million a year, shut up and buy a $500 bottle. So it’s a ratio as much to you income and to your asset base, which you have, meaning you’re debt-free, living in control. You’re saving and investing for the future. That’s when you enjoy things. But it’s a ratio as to what’s reasonable.
That’s where people get messed up on envy and on jealousy, too, and they say things like, “Well, you should never have a car like that.” I’ve got a friend that made $15 million last year. He bought a $400,000 car. I’m from Antioch, Tennessee. My brain cannot wrap its head around a $400,000 car, but as a ratio, a $400,000 car as a percentage of $15 million is like somebody making $150,000 a year and buying a $400 car. So it’s nothing. It’s not spit in his world, in other words. That’s how you can tell if it’s absurd or not. Is it a percentage of your world? Is it a big enough percentage to rock your world, and if it is, then you’re spending too much on that item. And you’re not giving enough, and you’re not saving enough, and you’re out of control on that item, but to say universally a $100 bottle of wine is too much—well no! That’s crazy.