When is it Okay to Spend Money?
Wed 7 Nov 2007, Written by Eden
Categories: Saving, Spending
When is it okay to spend money and how the heck do you draw the line between frugal living and being a cheap miser?
This is something I am struggling with a lot lately. It started with my plan to purchase a new MacBook this month and continued with my October spending review.
I think I’m doing really well at saving money and cutting my spending, but I got some great comments on those aforementioned posts that made me start to wonder and I read this post about frugal living at Paid Twice and started to feel bad about the amount of money I spend on things I don’t need.
So when is it okay to spend some money? Should I have the attitude that I’m in debt and my money should only go to necessities until the debt is paid off? Is it okay to buy something if I budget for it and I have the cash to pay for it and it doesn’t harm my budget in any other way? It’s not like I’m looking for permission to make a purchase because obviously I am working hard at managing my money and this is something I have to figure out for myself. I’m really just looking for ideas on how to approach this issue. Please share your approach to the NEEDS vs WANTS battle and when you think it’s okay to loosen up and spend some money (if ever).
November 7th, 2007 at 6:39 am | paidtwice said:
Well see, it really is all about balance. And for *me*, I look at it as a short time change (which could lead to a long term change obviously).
What if, for example, you decide to fund your mac book *only* from money you cut from other “flexible” parts of your budget? Say you set your fast food budget at $150 and only spend $100. That $50 could go towards your Mac Book fund. It’ll motivate you to cut some areas of your budget and reward you at the same time.
That is my thought, anyway.
November 7th, 2007 at 7:05 am | Frank said:
@paidtwice - that is a very wise solution.
One reason we want to buy the MacBook soon is that it will make my wife’s life a lot easier right away as she has a lot of work to do and only one computer to use (an old one that can’t even do a lot of what she needs to do).
My thought is to use the purchase of the MacBook as motivation to spend less on our flexible categories, which is the reverse of what you suggested. Much more likely to fail I’m sure, but it could work out.
November 7th, 2007 at 7:17 am | paidtwice said:
It could work out! It is different when a “want” becomes at least partly a “need”.
Yes you could spend less on the “need” part but then it wouldn’t be as satisfying a purchase and you wouldn’t be as happy with it. We are having the same discussion over a digital camera. ours will die any day now. Because of our much more constrained financial picture (we couldn’t buy an DSLR even if I sold a kidney) we’re having to make choices between things inexpensive enough we think the inlaws might be willing to get us for christmas lol (they always get us some “big” gift even if we don’t ask for one, so better to ask and get something you actually want. heh). But if I had a little more means I would totally be salivating over a Canon Rebel. lol
November 7th, 2007 at 7:32 am | Frank said:
We are fortunate to have the money coming in this month to cover the purchase with cash. Obviously, this wouldn’t be a consideration if not.
However, that also make me think we should be more wise with the ‘extra’ income and send it toward debt, but then if we are saving up for the computer we will spend the money eventually anyway…who knows, I’m going in circles now.
Good luck getting your camera! You could always add your wishlist to your site and a generous reader might buy it for you.
November 7th, 2007 at 9:30 am | TV Girl said:
For me, it’s mostly about two things: comfort with debt and maximizing your money.
How comfortable are you with your debt and the length of time you’ll be in debt? The more you spend, the longer you’ll be in debt. Do the math and figure out the difference in time if you spend $100 a month on wants or $50 a month (or whatever numbers you want to use). Are you okay with being in debt that much longer?
Are your purchases maximizing your money? Is the want you’re buying going to bring you enough use and enjoyment to make the price worth it? Cut out the things that have a lower price/enjoyment ratio.
November 7th, 2007 at 1:14 pm | Frank said:
Well said. I did consider the amount of extra time it will take to get out of debt when looking at the MacBook purchase. That is probably the best way to approach things.
I guess the key is to allow yourself a few of these expenditures, but don’t allow them to pile up and extend your day of debt freedom further and further away.
November 7th, 2007 at 1:52 pm | dawn said:
Frank - I think your a good guy that is trying hard to do the right thing. I just worry for you that you are focusing on the $ numbers too much and maybe not understanding that it’s a lifestyle change that has to happen.
It’s your money and you and your wife are entitled to spend it on whatever you choose.
I just don’t want to see you prolong your debt repayment to the point that you revert back to old spending ways (that got you into trouble in the first place).
You know in your heart what the right thing to do is, you just need to listen to it.
If you had a child that was in your situation how would you advise them to handle it?
This stuff is so hard, because we are all so different … there is never one solution.
November 7th, 2007 at 2:35 pm | Frank said:
Hi Dawn, good point on the lifestyle change versus the numbers idea. You are probably right, because I think if I had to pick either the laptop or the debt payment (with a gun to my head or something) I would definitely go with the debt payment.
Basically, I’m choosing the not-so-perfect route, but I am at least doing so with the knowledge of what I am really choosing. We can make a lot of good arguments for why we need the laptop too, so it’s not like I feel bad about it.
I’m not looking for the perfect answer, I am just using this site to figure these things out and document what I learn as I go. You and all the other commenters have been a big help. Thanks!
November 8th, 2007 at 1:32 pm | dong said:
I don’t think frugality in itself is virtue, frugality is a virtue only it allows cleaner living or allows you to be more generous to others. Some people get a little too hung up on not spend money, but really saving money is about being able to do other things with that money.
November 8th, 2007 at 6:11 pm | Frank said:
Well said, dong.