How do you perceive the value of money or anything for that matter? I believe that we have a bias on placing a much higher value towards things we own. For example, I feel enraged when I lose a Php20 pen I own, but I don't really care about a Php50 pen my sister loses. Recently, however, I learned of a different perspective to look at this question without considering direct material ownership.
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Scarcity: The True Cost of Not Having Enough by Sendhil Mullainathan and Eldar Shafir posits that not having enough, whether in terms of money, time, even calories, subconsciously alters a person's behavior towards choices and perceived values. Throughout the book, the authors give examples of studies and experiments backing this hypothesis. Taking a personal example, I actually become more wary with how I spend my money whenever I'm about to hit my self-imposed weekly allowance. This is the time when I scrimp on food by cutting out dessert and snacks to manage my budget. When faced with deadlines, I usually am a lot more serious in deciding whether watching a 2-hour movie is worth that precious time. I've also become more conscious of what I eat since imposing a calorie limit on myself.
The most intriguing part I've read so far though (I'm only halfway through the book) is the idea that the poor might actually have a better sense of the value of things precisely because they face real trade-offs in any of their purchases. Consequently, they may also suffer from fewer inconsistencies in their decision-making process. It's a striking insight because the way I think of it, no matter how frugal I think I am & no matter how I try to put myself in their shoes in order to understand their needs, I may never be able to fully comprehend them. And since I don't face real trade-offs in the extreme sense, I am now wondering whether I'm actually taking the value of some things for granted & therefore being extravagant in that sense.