OK let's see if you can follow this. You have a special...

OK let's see if you can follow this.

You have a special occassion coming up lets say its the 50th bday. You have some money tucked away, let's say 80k. You see a sale, cheap tickets business class to Europe 8k each. You decide "that's it!" I'll take the family to Europe. 5 of you at 8k = 40k still leaves plenty for hotels, meals etc.

Only problem is, you can't get everyone to commit in time, the sale passes you miss out. You sit there and think, "damn I really do want to do this, it will be great memories". You look 2 weeks later flights are back at normal levels 10k each. You, think and think and finally decide "I'm only 50 once! bugger it let's do it." you book 5 x 10 = 50k.

Are you telling me you've devalued your money? No you just decided to spend it on something you wanted when that ticket was available at a price your think represents value. Sure its a premium to the sale price but you decide you are ok with that. Of course your money hasn't been devalued it's still 50k, you could still spend it on something else worth 50k instead.

You could also decide to sit and wait for the next sale. That option is always there but maybe you feel like you always miss hearing about the sales until its too late, maybe the kids struggle to get time off and can't commit a year out or maybe you really just wont to go this year so you turn 50 in Italy. Bottom line, this is what you decide is a value you are happy with at this time and that works for you.

Oh and your other 30k that's in the bank? Still there, that hasn't been devalued either nothing has changed.