But I Really Want It! Controlling My “Buy It Now” Urge
We’re a double threat today! Thanks to Daisy at Add Vodka, where Joe can be found in this guest posting seat today. Read his: Money Problems? Jump On Board post there. While he’s gone, OG takes up his normal Thursday post here on the site. Enjoy!
Every so often I get this unquenchable urge to buy something. Sometimes it’s just a new shirt or pair of pants, but lately I really want a couple things:
1) I want a new house
2) I want a new(er) car
3) I want some jet skis
This is my personal downfall. Since I can’t actually just go out and buy these things with cash, I have to put a plan in place to make them a reality. You’ll remember from a couple weeks ago my post on goal setting – this would really help with these goals.
But there are some things that are just too big to plan for, right? Take my new house goal for example. The home I purchased in 2005 (right about at the peak of the market) was designed to be our “starter home” and we planned on selling it within a couple years. Oops.
So now the housing market is still bottoming out, do we take the leap of faith and try to “upgrade” with the prices and interest rates at all-time lows? While I have savings, I don’t want to raid my reserves or retirement accounts. Conventional financial planning wisdom suggests that I should start saving $x per month until I’ve reached my goal, but let’s be honest – how long would it take to save a big ‘ol down payment that I wasn’t expecting? Eight years? Won’t the “good deals” be all gone by then?
Since it’s now the middle of July (and I don’t live in the south) I’ve pretty much ruled out the jet skis. On Memorial Day, I wanted them bad – today, eh, not so much. But the car…whew! It’s heating up in here.
My oldest son starts Kindergarten at the end of August. This means we no longer have a daycare expense for him, which, while he’s been in daycare since 12 weeks old, has cost me about $66,000. Since I’ll be saving…er…not spending…all this money each week, should I treat it as “found money” and blow it? Save some? Save all? I mean, I could easily add $500/mo to a house payment (to upgrade, see above) get a newer car with a $250/mo payment and still save $3,000 per year!
I’ve learned a couple things about myself through this process:
1) I always wait on these goals. If it’s an urge, it’ll pass. The house and car? They’re sticking around.
2) I need to remind myself to line up these goals against my long term plans to see how they shake out. Will a bigger house payment affect our retirement strategy?
What would you do? If it wouldn’t hurt your long term goal would you upgrade? Say “Yes, I’d do it,” so I can show my wife.
Anyone? Help?
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I’d do it for the house but not for the car. Save up the cash for the car with all of the money you’d be saving and avoid the $250 payment.
WorkSaveLive recently posted..Recipe: BBQ Chicken Quinoa
Take your wife out to a nice dinner, rent a jet ski for 1 day, save up for the car, and pile up the rest of the cash till you decide what is really important.
Brent Pittman recently posted..Curriculum That Teaches Kids About Money
Oh man I do this too — but I’m not allowed to buy anything new until my student loan debt has been paid.
Kathleen @ Frugal Portland recently posted..Staycation: Playing Tourist at Home
Definitely rent the jet ski. Black hole! No one will want to maintain it after it comes out of the water and you’re tired and the last thing you want to do is clean it.
What would you tell your clients about the car and the house? Pretend you’re a client
Lance @ Money Life and More recently posted..Budget Basics: Know Your Income and Expenses
I agree with Jason. Financing a vehicle is to invite misery. Use 90 day rule to defer an urge to buy anything. It will give you time to put pros and cons of your decision. You can squash the bug easily once you know why you don’ want to buy.
Shilpan recently posted..Build Financial Freedom with an Automated Wealth Machine
I believe you have to take the situation as it comes. Save up the money over time. You’re only talking yourself out of it because you don’t know what the situation might be like. It might be better, it might be worse, but at least by saving over time you are making the right short term financial decision and not blowing your money all in one go. You also receive the benefits of interest payments over time, which you would not get otherwise.
MultimillionaireRoad recently posted..What to look for with a Savings Account
I would think of this as getting a raise at your job. It doesn’t mean that you have to spend it, you just have more security. You could spend some to come to FinCon if youre not already going
Sean @ One Smart Dollar recently posted..6 Tips to Get a Great Deal on a Car and Avoid Car Dealer Tricks
I’ve already tried to tell him to come, Sean, but he says he has a “golf outing” already. Priorities. You’re stuck w/ me instead.
Difficult choice. I’ll rent the jet skis; keep off buying a newer car (if the older one is still working) and go for the house.
maria@moneyprinciple recently posted..The Money Principle Needs You: Tour de Personal Finance Round 2
Great article! Reminds me the article I did now to long ago and how I am reminded – Please Slap My Hand When I Spend Money!
The simple rule is this. If there is money in your pocket, then it’s sure to catch fire sooner than later and burn a hole in your pocket.
Thanks for a great read!
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