Money-Savin’ Mama: Using utils to maximize money

When my husband and I discuss a purchase, one of us will often turn to the other and ask about the utils. “Does that give you positive utils?” “Which one of these is worth more utils?”

I never took econ in school but find myself using that economics term – short for “utility” – on a regular basis. It’s a concept my accountant husband introduced me to, and one that’s allowed us to think about our money in a different way.

In economics, utility refers to the satisfaction or usefulness received from consuming a good or service. If you like apples more than you like oranges, apples are worth more utils than oranges.

Of course, it’s far more complex than that. Utility can be expressed as a formula using symbols I don’t recognize and calculated in theoretical ways I don’t pretend to understand.

Instead, for me, utils (pronounced YOU-tils) are a casual way to discuss discretionary spending.

I’m sure my rudimentary understanding will make some economics professor throw down his newspaper in disgust, but here’s how I think about it. Utils help me discern when I get more joy out of spending money than not spending it.

Let’s say a massage costs $50. When your back is killing you, you might be willing to pay $100, meaning the $50 massage would provide positive utils compared to the money spent on it. When you’re already feeling relaxed, a massage might only be worth $25 to you. So spending $50 on it would create negative utils.

If you’re starving, a $1 double cheeseburger would be an amazing amount of positive utils. But after you’ve eaten 12 and are so full somebody would have to pay you to eat another, buying another would put you in negative util territory.

So to make the most of our money, my hubby, Craig, and I like to make sure we’re always getting positive utils.

For example, our home is just outside the flood zone in Fargo. We aren’t required to buy flood insurance, but the peace of mind having that policy definitely gives Craig, who lived through the 1997 flood in Grand Forks, positive utils.

I couldn’t justify spending $200 on a new pair of boots this winter. I just wouldn’t get that much use – utils – out of them. But when they were marked down to $40 on clearance, I happily purchased them, knowing my utils on the brown boots would be in the black.

As a treat, I occasionally splurge on a frappe. If I bought one every single day, they wouldn’t give me as many utils. But denying myself a frappe when it would provide me positive utils isn’t a great idea, either. Deprivation can lead to excessive spending later.

It’s a matter of finding the balance to maximize the utils.

I often preach that people learn to distinguish their wants from their needs. This is crucial to balance an out-of-whack budget and rein in spending. But what’s life without some wants? That’s where utils come in.

They help me understand whether this want is really worth what I’d spend on it. The exercise forces me to further analyze my wants in terms of the money I have available.

For me, utils are useful, even if I never cracked an econ book.

Sherri Richards is a thrifty mom of two and reporter for The Forum.