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Rationalizing an Expense By Changing Your Words

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As any marketer knows, words have a power beyond their literal meaning. No one knows this more than political marketers, who create campaigns that usurp specific words and ensure their meaning is replaced with some sort of thought the’d like to embed in the public consciousness. This effect isn’t only thrust upon us by marketers; we use words to frame our own actions in ways that minimize any negative aspects.

One specific example of this is the use of the word “invest.” The literal definition of this word is “to put money into (a thing).” There is, however, a connotation or sense that in most cases, “invest” means “to put money into (a thing) with the hope of financial gain.” That’s a more specific, more positive sense, that people who use the word “invest” want to convey.

If you apply for a student loan, you, the lenders, and the schools rationalize going into debt by framing it as an investment in your future earning power. Future income is not the only reason people earn college degrees, but financial people want to express the benefit of an education in financial terms.

When you buy your first house, you will call it, or you likely have called it, an investment, particularly if the purchase costs more than you can handle. With the hope that house prices will rise, considering it an investment convinces others, but more importantly, convinces yourself, that the choice will pay off in the long run.

Car salespeople know this, and will often use the word “invest” when they want to make a sale. There is close to no chance of financial gain when buying a car, but they will use this word because of its positive connotations. If you feel like your making an investment rather than spending money now and committing yourself to spending more money over the next three, five, ten, or more years, you’ll be more likely to part with your money.

It’s more fascinating how we use the word ourselves, though. Rather than buying clothing, one might say “investing in a wardrobe.” There may be some logic to this, if having nicer clothes is a prerequisite to earning more money in your position. In order to advance in your career you should, among other things, dress more like those whose jobs you’d like to have. The idea of “investing in a wardrobe” is used by people who have no such ambitions. For those who do think a set of new suits will be the deciding factor for a promotion, keep in mind spending more than you can afford on clothing is not a guarantee.

There’s always a case for buying quality rather than choosing the most inexpensive option. That’s not the point here; the word “invest” is often used when people spend more than they know they should and want to convince others as well as themselves that they made the right decision from a financial standpoint.

Here are some other items people “invest” in rather than buy when they want to spend more than they should:

  • “Good” furniture. Not too long ago (when considering the age of modern civilization), furniture was built to last generations. Families were less mobile and could easily pass well-built furniture to children for several cycles. It is possible to invest in furniture that could last over a hundred years, suiting the needs of future generations, but that’s unlikely. Most furniture built today will be replaced within the initial owner’s lifetime. The concept of “investing in furniture” no longer applies.
  • Electronics (computers, home theater systems, etc.) Buying the latest and greatest electronics may be a way to invest in your continued relevance within your social circle; if you want to hold the Superbowl parties, you’ll need the biggest, highest-definition, most-dimensional television. That’s as far as you can take investing when a product’s life cycle is only a few years before becoming hopelessly obsolete.
  • Home business scams. Be wary of any product that promises you the ability to earn money on your own — but only if you buy an introductory home business kit, e-book, or some other limited-value item. This will always be framed as an investment but few people earn enough to cover their initial outlay.

See past the marketing and be aware of any self-delusions. Words are powerful, and using the word “invest” instead of “buy” often masks a dangerous financial choice.

Photo: soopahgrover

Published or updated October 18, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 13 comments… read them below or add one }

avatar TakeitEZ ♦549 (Dime)

Nice article. I agree with everything stated in it. Although, my wife and I did purchase a pricey bedroom set five years ago. It truly is great quality and will last for a lifetime. We plan to keep it for our lifetime.

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avatar Steve

I quite enjoyed this article.

As you said in the first paragraph, there are other words that can have a powerful effect on how a situation is perceived. My wife has always said “My grandmother paid for my college by PLAYING in the stock market.” My parents-in-law invest almost all their money in CDs. As you can imagine, even though stock market investing paid for DW’s college, with the way she words it her grandmother just got lucky. My wife (and her parents) are very risk averse.

There are many other loaded words. They use them in those fake surveys on the phone – they pretend to be collecting opinions but are in fact trying to influence them. Sometimes subtly, sometimes not.

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avatar Apex

I find this to be pervasive in politics and quite annoying when it comes to getting a handle on government budgets.

What does govt invest in?

education, roads, health care, seniors, children, security, etc (I am sure I forgot some other obvious ones as well).

Are these valid things to invest in? Mostly no, they are expenses.

Now maybe education and roads because they do have potential future payoffs. However they are still expenses, costs of doing business if you will. They are important and without them the country suffers financially so there is some investment standpoint to those I suppose but every increase in the budgets is always couched as an investment.

What about the other items? Are those investments?

Investing in health care? No, there is no return for that. People live longer and that is great but that is not a return on investment. It is actually a future expense as those that live longer will need further expensive care.

Seniors (i.e. social security). No. it’s an expense. Yes it might seem like an investment as social security is supposed to be a retirement type plan but there is no investing aspect to it. It’s a simple transfer payment and as such merely one generation paying the expense for another hoping the next will be able to do the same for them. There is no investment, its an expense.

Children (i.e food programs or housing and other assistance programs for under-privileged children. I know education is also in this category but I dealt with it separately). Definitely not an investment. There is no return. It may very well be the right thing to do but it’s an expense, there is no investment aspect to it. For anyone who wants to argue that keeping children alive and healthy prevents future expense, it’s still an expense, just one to prevent a larger one. For anyone who wants to argue that it’s helping a future taxpayer to stay alive or stay healthy and productive then one would have to argue that abortion is a huge anti-investment. To keep it simple it’s merely an outlay of cash which has no return.

Security (i.e. military, war, police, fire protection, etc). These may all be things that are important to keep us safe or protect our assets but they have no return. They are not investments. They are more like insurance policies and barring the whole life versus term debate, insurance policies are not investments. It may be smart to insure your car or insure your house or insure your life if you have dependents, but to argue those are investments with expected return is pretty silly.

Many things government does has benefits to us as citizens. Just like buying a TV has a benefit to me, or buying a car, or buying a couch, or paying for heat. Expenses are valid and necessary. But calling them an investment is a big lie.

Most things are expenses. If we could call them that then we could have an honest debate about which expenses are most important and which ones we can afford to trim. I mean we do have a 1.3 Trillion dollar deficit so we might want to eventually get serious about doing a little bit less “investing.” We appear to be “investing” more than we can afford.

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avatar Luke Landes ♦127,475 (Platinum)

I couldn’t agree more. Politicians are in the business of choosing the best words to make their products (policies) sound the best to their customers (constituents).

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avatar eric ♦1,549 (Half-Dollar)

Politicians jumped right to mind for me too.

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avatar Financial Samurai

Gotta say though, “investing” in a $1,500++ mattress is one of the best investments I’ve ever made! Words are powerful, and can be also truthful!

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avatar Luke Landes ♦127,475 (Platinum)

You sold the mattress for a profit? Maybe it’s one of the best purchases you’ve made, but as an investment… I would think mattresses don’t perform well. A mattress can, on the other hand, be a good place to literally “invest” cash if you don’t trust the financial industry at all. But most of those who do this put their money under the mattress, not in it…

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avatar lynn ♦155 (Cent)

LOL Good point there, Flexo.

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avatar DonnaFreedman ♦75 (Newbie)

I think I know what Sam means. A relative has a chronic health condition (autoimmune) and sleep is not easy. Buying one of those memory foam mattresses could be considered an “investment” in her health in that if she rests well she is less likely to come down with colds, the flu or other ailments that just LOVE to attack. Doing so means less time spent at the doctor and less money for co-pays and prescriptions. It also means feeling as good as she is able to feel.
Not sure “invest” is the right word…Maybe “bit the bullet and paid more” would be a more accurate phrase.

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avatar AskCareOne ♦110 (Cent)

I personally am guilty of rationalizing purchases with “this is an investment” when in fact hey most often are something I really want not need. This post was an eye opener for me as often I do this without even thinking! Many of us feel we have to justify the purchase with something so saying it’s an investment in better sleep, comfort, or the use of less products makes it ok. But these things are not true of a real investment.
Thanks for the great post!

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avatar Jenna

It really bugs me when I hear woman talking about “investing” in clothes or shoes.

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avatar Erin

A good trick for when you find yourself rationalizing a purchase with “invest” is to swap it out for “dump”. So, if you’re thinking “It’s a good idea to invest money into ___ because….”, try it as “It’s a good idea to dump money into ___ because….”. It will quickly remove the sense of automatic gain, letting you focus more on the actual trade of your hard-earned money for whatever benefits and burdens the purchase DOES offer.

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avatar KNS Financial ♦404 (Nickel)

Great point about the word “invest”! It is definitely misused, and I have been guilty of this type of thinking in the past. It is amazing to think about how we can so easily justify our lack of discipline!

I think that we also mistake “a purchase with a benefit” with the idea of “investments”. Either, everything that we put money into is an investment,or only those with positive outcomes…something is definitely wrong here!

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