Thursday, April 23, 2009

A Lesson in Economics

So recently I read this interesting article about "Just in Time" economics (JIT) vs. "Just in Case" economics (JIC). Apparently Toyota introduced this JIT theory and this article explained how it could be applied to your everyday life. So the gist of it is that we live in a world of excess. With the Just in Time theory you order things as you need them rather than stock pile items for someday (JIC). So Toyota orders their parts as they are building their cars and whips them out "just in time" for the consumer. Costs stay down. They make money - everyone is happy.

OK, how does this apply to me you ask? Well, how many of you have bought 10 giant cans of corn at the can can sale (If you don't have Shop Rite near you this isn't nearly as funny as I think it is) because they were buy 10 for $10? What a bargain you say! I need corn. Its always good to have corn on hand. But do you really like corn that much? Do you end up opening the pantry door saying, ugh, I just can't eat corn again. And then the day comes when can are in the mood for the corn, but you haven't eaten it in so long that its expired, and you end up throwing out 5 cans, and effectively $5. You know you have all done this!!!!

So my next question is, do you expand this into other areas of your life, like say when Payless has their BOGO sale? You probably don't need one pair of crappy shoes, but if you can get the 2nd for half off, suddenly you can buy those "just in case" strappy sandals for that wedding you "might" have to go to this summer... or maybe you buy those clothes at Macy's cause they are on sale and you could always use another (insert article of clothing here)! Meanwhile there is stuff in your closet that still has the tags on that you bought at the last sale, but doesn't fit quite right. But you save it "just in case" you gain or lose 5lbs and then it will be perfect! Guess what. That dress from 1992 may actually fit now, but you look ridiculous in it!

Then there is the "well I want to impress people as much as I can" version of this. Otherwise know as "keeping up with the Jones'". It has very similar principles. While I am all for people living in nice homes and driving nice dependable cars, some people live in a world of excess or "just in case". For example, you may buy that nicer car, just in case people don't know (or think) you are wealthy, powerful, or have, well you know where I was going there...

So in this economy, I think people are starting to wake up to this. I mean what do I care if Joe Schmo *thinks* I have money based on my house, car, clothing label etc. Most likely they are in debt to their eyeballs. But that illusion has become more important than the reality. I'm by no means saying to sell your house and live in a shack. But do people really need 5 bathrooms when they have one kid?

And no, I am not better than anyone here. In fact I have fallen victim to this myself. I got very caught up in appearances and straddled myself with a crazy car payment for a very zingy German car. Then I woke up one day and realized that this excess or "just in case" lifestyle of compiling as much as a person can to keep up an image, was a major contributing factor to my dad's death. Money, or the thought of being poor again (he was a poor kid) tortured him. People saw him as a well known business owner in the community, thought he did very well for himself and he thought that is why people respected him. When in actuality people respected him because he was a nice guy that would help anyone out. He could make anyone laugh, he did anything he could for his friends, family and community. Nobody knew his finances. And if they did would he stop being my dad? No. And money is a stupid thing to die over. So, I went and traded in my zingy German car yesterday for an equally zingy Toyota. Its cute, smart, and reasonable. Just like the new me. And now I will have an extra $200 in my pocket - well actually my credit card will get $200 more per month. (And yes - the closet will get a clean-out as well, I can also admit I was a brand whore at one point lol)

And remember, we live in a world of excess. It will still be there when you *truly* need it. Its not 1600 anymore. We don't have to stockpile the corn just in case its a really bad winter. We can get plenty at the can can sale.

"The only baggage you can bring Is all that you can't leave behind... You're packing a suitcase for a place none of us has been, A place that has to be believed to be seen... And I know it aches And your heart it breaks, And you can only take so much ...
Walk on, walk on" -U2

1 comment:

Knight Writer said...

Great Blog! I read that article too! The next day I was in the grocery store thinking " So do I buy 10 bottles of dishsoap while they are on sale?" Then I had to have the conversation in my head about it. I bought them.