The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: sibamor on January 29, 2013, 10:44:54 AM
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All of us in this community are working on doing the sane thing when it comes to large purchases. Save first pay in full (when possible). But what do you do with those more modest purchases that take up more than 2-3 months subcategory in your budget that you have the reserves for. IE Monthly hobby budget of $100. You got your eye on a sweet new toy that is $300. Do you purchase now knowing you can't spend the hobby budget for 3-4 months. Or do you wait 3-4 months saving up in that budget category and the purchase. I used a Hobby but it can be new lights as part of home repair budget or a trip as part of your vacation savings.
What do you do Mustachians?
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I just bought new kitchen cabinets. I projected how much I could save in 12 months, deducted 10% as a safety margin then put them on a deferred payment credit card. I came in $1,000 below that target budget so even if some ca-ca hits the proverbial fan, I'll be fine.
I had wanted to do the prudent thing and save up first but I got sucked in with that deferred payment option. Plus the cabinets themselves were on sale and I have a very skilled family member who installed them for free.
So, I think if you're clear about your financial situation and your ability to save, borrowing from yourself in this way can be just fine.
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All of us in this community are working on doing the sane thing when it comes to large purchases. Save first pay in full (when possible). But what do you do with those more modest purchases that take up more than 2-3 months subcategory in your budget that you have the reserves for. IE Monthly hobby budget of $100. You got your eye on a sweet new toy that is $300. Do you purchase now knowing you can't spend the hobby budget for 3-4 months. Or do you wait 3-4 months saving up in that budget category and the purchase. I used a Hobby but it can be new lights as part of home repair budget or a trip as part of your vacation savings.
What do you do Mustachians?
I wait until I have the money to pay for it. One of three things will happen during this time:
- I will realize that I can make do without it, thus saving me an unnecessary purchase.
- I will find it for cheaper, or get a used/discounted version that saves me money.
- I will appreciate it more when I finally get it.
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I don't budget anything. For me, it is a slippery slope to consider money as extra that I "deserve to spend" because hey, I did such a great job of budgeting already! Your mileage may vary.
It all boils down to trusting your judgement not to make impulse buys that you will regret later.
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+1 for GuitarStv. Save up until you have the money - or until the budget category's savings add up to your purchase price.
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Add another vote for zero-interest credit cards and similar. It's not that I couldn't pay for purchases out of pocket if I wanted to, but the free money aspect is appealing. It can also be a time saver: I used to visit Home Depot every few weeks to pick up materials for whatever project I was doing. Now I wait until they have one of their 12-month zero interest offers, and pick up stuff for several months worth of projects all at once, saving time & gas as well as earning interest on the money.