Have you ever wanted something so much that you were willing to spend more than you could afford to get it? I’m pretty sure we all have and with the average consumer having as much credit card debt as they do I think a lot of us have indulged a little. Its one thing to indulge $100 for a pair of pants on a credit card and another to buy a brand new car while you’re making minimum wage.
The purchase of the TV this past weekend really got me thinking about purchasing the bigger ticket items. I know that I’ve run into the big-ticket items in my past that I wanted but couldn’t really afford. In the case of the TV it wasn’t so big that we couldn’t pay for it outright, but much bigger and we wouldn’t have been able to. You have to be realistic about life’s bigger purchases because wanting it doesn’t mean you can necessarily afford it.
When you’re faced with a big purchase like a brand new car you have to be realistic about the purchase even though it’s hard. Cars and houses are great examples since they are so incredibly expensive few of us can buy them for cash. We had the opportunity to buy a cottage a few years back at a great price. We had most of the down payment and we could have almost afforded the payments. The reality of it was that there was more there that we weren’t considering because we really loved the idea. Being realistic about a big purchase like this can be hard but you have to do it! We were trying to be realistic but we were still being clouded by the thought of the purchase.
The best thing to do is to take the emotions out of it. I know this is easier said than done, but if you let the numbers do the talking then you’re more likely to keep those emotions clear of your decision. If you have the luxury of time you should try the payments out for a couple months. Pretend as if you had made that big purchase and set the money aside. In the case of our cottage I think we would have very quickly realized that it was more of a pipe dream than a wise decision. Buying a car or a new set of kitchen appliances can be very similar.
Think about the decision as rationally and logically as you can. If you have to seek some advice from an impartial person then do it but by all accounts don’t make your situation worse as a result of the purchase. We’ve all been hearing about the mortgage crisis and all those houses being foreclosed. I’m sure each case is unique but I wouldn’t be surprised if a lot of those people were buying homes that they weren’t realistic about and couldn’t afford.
The hardest part when you’re looking at big purchase is stopping and forcing yourself to think about it from a rational point of view. We can all see ourselves driving that new convertible or imagining what we’ll do with all the extra rooms. Be realistic about the big-ticket items you buy so when you do buy them you own them and they don’t end up owning you. As a side note, in hindsight if we had gotten that cottage our financial situation would have been very bleak right now so I’m glad we ended up not getting it. There will be other cottages in the future.