How to Make the Right Buying Decisions

Though I have a budget–and stick to it for the most part–there are sometimes things that “come up.” They aren’t necessarily emergencies but a decision needs to be made about whether I am going to part with my hard-earned money for an actual physical item or service.

Surely this happens to you too.

One of those things for me recently was a new laptop. I had dropped mine (like I had the one before that…I never considered myself clumsy but maybe I am?!) and had broken the piece where the charger goes in. There was no way to charge the laptop, and it eventually died (whodathunk?)

I sent it into the manufacturer, and they said it would cost me 200 BIG ONES to fix it. I bought the laptop for $350 so I thought that wasn’t necessarily the best idea.

So off I go laptop shopping….because I can’t live without one, right?? 😉

Well it definitely wasn’t in my “budget” to drop $600 on a new laptop that week. But I did. You may be thinking, “Well, that’s not frugal” or “What about the budget, Meghan??” I understand both of those and here’s a few thoughts to consider when situations similar to this come up.

When to Spend Outside Your Budget

There’s not a formula (or maybe there is! Anyone care to share?) but I realized when I broke my laptop that I truly did need one. It wasn’t an emergency–there were other laptops available to me, but in the long run, to do what I need to do on a daily basis, I need my own laptop to save files, surf the internet, do homework, create new posts, connect with friends, etc. It wasn’t in my budget, but I had to make a way where there was no way.

This could potentially come up when you are out window shopping with your friend (who’s REALLY shopping) and you find the greatest deal in the world on something you’e wanted for a long time. You didn’t PLAN it for that month (or week or however you do your budget) but if you’re ever going to buy it, NOW is the time. Guess what? There’s nothing wrong with that….As long as you CAN. And when I say “can” I mean as long as you have enough money to pay all your other bills, feed yourself and still get to work everyday.

Depending on your cash flow this may or may not be an option, but here are some steps for us to take to make sure we make the right buying decision:

1. If possible, wait.
For me, this was possible. I was able to search out different laptops and decide which one I wanted. I didn’t have to go buy it the day my other one broke. There are plenty of people I know (in my house) who will let me use their computer. So that is what I did. I used my dad’s while I searched for what I wanted and decided whether I wanted to part with my money. Impulse spending WILL get you in trouble! No doubt. Wait at least 5 days before making a big purchase just to make sure that is exactly what you want and for that price. Sometimes this isn’t possible–the deal ends today–and in that instance, if it’s not a need, you might want to part with it.

I waited at least a couple of weeks going back and forth on what I wanted to do. But I’m glad I did.

2. Find the best deal.
Duh, right? But just think about some of the people you know who spend the extra 15 cents a gallon for gas just because they don’t feel like crossing the street. Some people are just…..not smart! =) Take the time to find the best deal. When I was buying my laptop, I didn’t do this. I paid $600 at Best Buy for the exact same laptop Office Depot was selling for $550 that week. After I bought it, my dad (the smart guy he is) researched it a little more and let me know about the discount at Office Depot. So I took the TIME to go back into Best Buy and ask them for a price match (which they gave me.) Don’t be like me–find the best deal.

3. Evaluate your cash flow.
Honestly, it wasn’t in my best interest to part with $600 (laptop plus tax) in cash that week. Yes, I had waited. Yes, I (or my dad!) had found the best deal, but I still didn’t want to give the cash. If it wasn’t something necessary to my life like a laptop I probably would have waited longer and just saved up the cash to specifically buy the laptop. But it was coming down to the point where I really did need it, and I didn’t want to use my Emergency Fund to pay for it. So what do you do? If you come to this step and you realize it’s not in your best interest to part with the cash, decide then and there whether this is really a necessity (for the situation, time, and price.) If it is, look for the best payment option. If it’s not, maybe you should pass this time.

4. Decide how to pay.
I didn’t want to part with all the cash so I looked at other options. I could put it on my regular Visa credit card and pay interest on it (because I knew I wouldn’t pay off the entire balance in a month) OR I could sign up for Best Buy’s card and get a “same-as-cash” deal where some bank pays for it and as long as I pay them back the full balance before 18 months is up it’s the same as cash, no interest charged. When all was evaluated, this was the only way for me to buy this laptop. I wasn’t going to put it on my credit card, and I wasn’t going to part with that amount of cash at the time. So if this option wouldn’t have been there I would have chosen a laptop that was less expensive and paid cash for it. Sometimes these kind of deals are available and sometime they’re not. But look and ask! You’ll never know if you don’t.

Have you had to buy something that was “out of your budget” recently? How did you handle it?

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Mindless Money Wasters

J Money at Budgets Are Sexy is always a source of inspiration for me. I know there are many personal finance bloggers out there but he’s just my fav. He was also really the 1st one I stumbled across so I think I’m biased.

But he posted here some mindless money wasters he had got from Free Money Finance who I guess had gotten them from Yahoo. All that to say I couldn’t relate to many of those mindless money wasters but I know I have my own so here is confession time. I know there are many more but that is for another time and place. 😉

(I know I haven’t written a lot about my finances, budgets, etc. but please have the understanding I really love to keep track of that kind of thing, and I try to be frugal. So this is a hard list for me to share with you guys!)

1. Movies.
Watching movies is one of my new favorite things to do. And most of the time it’s in the theater, opening weekend. So I do throw too much at this. I’ve been trying to find some more good, cheap (or free!), fun things to do though and lately I have succeeded on a few occasions. 😉

2. Popcorn and drink at the movies.
I used to NEVER do this. I mean, I’m paying as much for that as I did for my ticket. But then I met my awesome friend Chara who I don’t think even believes in watching a movie without popcorn and a drink. So now I’m hooked.Popcorn with Kernel Season’s Jalapeno Seasoning (the BOMB) and a half Pepsi, half diet-Pepsi drink.
I’m thinking to cut down, maybe every other time I’ll eat right beforehand and then just drink water during. 😉

3. Eating out.
Of course, this is a big one for all of us, I am guessing. I try to limit my eating out to the weekends when I can actually enjoy it with people I love. But I need to cut it to only 1 time a week. Right now it’s hovering around 2-4. Some weeks are better than others.

4. Good deals.
This week I had committed to a “no-spend” week where I wouldn’t spend any money unless I absolutely had to (gas and bills.) But I realized what a sucker I am for good deals when a woman at work is selling makeup products for half off. I gave in and bought a few though I didn’t absolutely HAVE to have them. And then today I bought a $4.99 cutlery set online because well, I will need it eventually and it’s such a good deal.
I’m all about good deals but they can potentially be mindless money wasters if you are only buying cause it’s a good deal and not because you actually need whatever it is.

Ok, don’t think I’m crazy but that is pretty much it for me…right now. I’m saving for A LOT of things so much of my money goes toward different savings accounts.

But what about you? Have you fallen prey to any of these mindless money wasters?