Big Purchases

Recently, I’ve had to make a few rather large purchases recently, and because of the taxes that I was fortunate enough to pay this month, For the first time since August 2009 I spent more money than I took in – but barely.  When I was dealing with the taxes and all that, it seemed like once I knew I was going to spend quite a bit of money, some of the other purchases I made seemed rather small in comparison.

For instance, I paid 2,000 in taxes – so when I went to the store and some a sweet deal on the cookware that I use frequently (and have been slowly building up my collection), I decided to jump on the deal instead of waiting (though had I not bought it, it would have been the 3rd time I passed on the price, and I wasnt sure it was going to cost what I paid for much longer).  Even though I’ve still got some debt, I dont mind spending some of my hard-earned money on this type of cookware .  I enjoy cooking, and I highly value products that come with a lifetime warranty that I know I can purchase one time and never have worry about again.

Recently, I’ve been able to turn away from this purchase, but when I was in the store, I had the tax payment I had just made directly in my mind.  While the purchase (~150) was typically much larger than all of my other one-time spending has been in recent months (with the exception of rent).  This month, however, that was not to be the case.  I had just paid a 2,000 bill, so in comparison, my purchase was small, so in my mind the spending I did wasn’t going to bother me.

How do you handle spending large amounts of money?  Does it instinctively loosen the purse strings, or do you cut back harder than normal to compensate and try to make up for the abnormally large spending?

Did you enjoy this article?
Share with Friends
Sustainability Tips:
About Jeff

Jeff is the founder of sustainable life blog and has been interested in sustainability for most of his life. After realizing in 2007 that his finances were a total wreck, he started reading financial blogs and quickly realized that what is best for your wallet is typically better for the earth, and is usually healthier. On sustainable life blog Jeff shares his journey to a more sustainable lifestyle. For updates, subscribe by email or like us on facebook.

Comments

  1. Interesting thought process! I tend to spend less after I’ve made a big purchase because I picture my poor bank account. I’m a sucker for kitchen stuff, though, so I might have made the cookware purchase you did. Congrats on that. What did you buy?

    • Yea, I usually feel for my bank account, but after walking by that cookware sale for the 3rd time and knowing how much it’d get used (this was in april, I’ve used it almost every day since) I dont mind spending the money. It was a 2-in-1 cast iron pan. I use the top half (frying pan) more than the bottom (sauce pan), but it is worth it.

  2. That is an interesting way to look at it. Reminds me of basic sales techniques where they sell you the big ticket item first, then tack on the assessories because now they seem cheap in comparison.

    Only in your case, you paid your taxes, then purchased something you love.

    I tend to look at big purchases on a need basis. If I really need it, then I don’t have a problem going for it. However, I tend to only buy things for my business so those are expenses and necessities. I have had the pleasure of ditching my ego, so there are very few things that I want for personal reasons.

    If I could only get the kids and the wife on the same page.

    • Thanks for commenting freddie! I usually dont spend more than 40 bucks a throw (except for gas) but when I do, it makes other things that used to seem large seem smaller and less significant. I think that my taxes needed to be paid, so I bought the pan. I used it all the time now. It was worth it, and I havent been back to the store, but I’m not sure if the price has gone up or not.

      • Well, it sounds like you made a great purchase. If you actually use the pan and enjoy it, then that is great. Sometimes we get so caught up in the numbers and how much money we can save or keep that we forget live is meant to be enjoyed. The joy the pan brings to you and your cooking is awesome, well deserved, and worth your hard earn bucks.

        I purchase my wife a new cooking set for x-mas and she raves about it still. She would never spend that kind of money (like $140) on herself, but she sure does love it….in fact I feel like I got it on sale for $118 bc the higher number would be tough for me. LOL

        Anyway, enjoy that pan , get back to work, grow this blog, and make more money to buy some of the fun stuff every now and again.

  3. I do lots and lots of research before making a large purchase. That way I don’t have to worry about questioning if I made the right decision. I already knew I did before I actually spent the money.

    • Hi Jenna – I wasnt too worried about the pot – I knew it was something that I needed and could use heavily, and I already have 4 of the same brand, so I know quality isnt an issue.

  4. I go on the internet to find the best deal! It also slows me down which is a good thing. I started doing this with small items too. It is more fun to find the “deal” than actually buy the product.

    • I agree KC – usually I whip out my droid when Im about to buy something over 50 or so and do a quick amazon search. If the prices are close, I’ll just buy it at the store, but if not, I’ll wait and get it online.

  5. I’ve had to make some large purchases here and there but I’m able to sleep at night because I have a decent emergency fund and multiple streams of income. It still pains me, but not as much as when I was younger; I research, never pay ask price and haggle with the intent of walking away if the deal doesn’t work for me.

    • Good advice darwin – I’d have to say that i’ve never haggled in a store before – I just never know if they’ll go for it or not. I guess I could have walked to the other side of the mall and gotten it from the other store if they asked me to leave.

  6. Since we budget monthly for things like taxes and insurance I don’t consider them spending large amounts of money. So, when confronted with a large, for us anything over $50, purchase it must be for something we need and know is a good price. For instance buying a piece of cookware that I don’t have, is the size and quality I need and I know is a good price because I’ve done my research, would not be a problem. However, to plunk down $150 on a name brand wallet, as a friend did recently, would never be something I would do – my $1 wallet from the thrift store is just fine. Spending large amounts of money is up to the individual and their priorities.

    • Hi Bellen!
      I really wasnt sure about taxes, and because it was my first year working a full time job, I didnt know what to claim or how much I may owe/get at the end of the year. Now that I know better, hopefully I wont have such a big bill. As far as the pan. it’s a great company and comes with a lifetime warranty – and it’s my 4th piece made by them, one i’ve had for 3 years and it’s still as clean as the day i bought it.

  7. I know what you mean – you’ve already spent $2,000, what difference does $150 make?

    I ran into this problem when I set a goal to save $1,000 in a month. If I was looking to be at $950, I would have made a huge effort to find $50 to save in my food budget (or elsewhere in my budget but food is the focus at the moment). However, since it’s looking like I’ll only save $750, I ended up blowing almost $50 in one weekend eating out a couple of times. So, I have the same mental process where I’ve already missed my goal by $250, what does it matter if I miss it by $300?

    • Hi Kellen – thanks for 2nd-ing my feelings. I mean if you miss it by an inch, you may as well miss by a mile, right? End result is the same.

  8. If I’m presented with a large expense, like replacing our AC system last month, it tightens the purse strings. We’ve even been going to the grocery store less, and forget about the movies.

    But, if we’ve been on track with our savings for a couple of months, it is definitely easier to throw some money around. It seems like I have a baseline spending limit in mind and I am comfortable being close to that.

    • Great point – at this stage, I was on track for about 9 months before I dropped all cash. I think the longer you stay on track, the easier it is to veer off.

  9. I see myself doing this, it’s like you’re a little numb afterwards.. makes it easier to splurge on things you wouldn’t otherwise. While I always say that it’s good to have a little fun, it’s easy to go overboard so I urge people to be cautious in these situations. (Myself included)

  10. It does make sense that $150 can seem like small change in comparison to $2000. I know we have times when we get on a spending roll for a month or so, and then pull back the next month.

    It helps that most of our big purchases come out of our long term emergency fund. It mentally separates our spending habits, in a way.

    • That’s a great thing to have Lindy – If I could have pulled that out of a separate account, then I probably wouldnt have bought the pot. I’ll need to get to work building one of these up.

  11. I tend to batten down that hatches after a big purchase. The exception is when we go on vacation. If I’m in China, I’ll pay to go walk on the Great Wall damn it! ;)
    There is no point cheaping out if you’ll regret it later.

    • Great point Joe – I try not to worry TOO much about money on vacation – esp if you’re going to be gone a long time. It could cause you to miss out on some things that you’ll regret later.

  12. very simple, I dont spend a large amount of money. Largest purchase I made is on a car for $6000, that too afters eeing almost 20 other used cars.

  13. Unfortunately, I have noticed this to be true with debt, as in “I am so far in debt already, what does $XXX matter?” Of course, that only compounds the problem.

  14. I understand where you are coming from on this and I don’t think it was a bad decision, but for some this could be a slippery slope. When we would make big purchases on credit we would do this type of thinking, but not with one thing and it adds up quick. Big purchases, little purchases, no wonder I was in almost $15,000 of debt.

    Your situation is a little different. Glad you got some great cookware:)

  15. I do lots and lots of research, if I decide to buy I save for that and then buy. I bought a Le Creuset sauce pan a few years ago. It took me 2 years to complete the set, but I bought them entirely with my gift cards to William Sonoma (I love that store!) from credit card rewards. I could have put my own money and bought them sooner, but I didn’t want to. I am extremely happy with the cookware though :) Which one did you get?

  16. I think that buying the things you love and will use every once in a while is not a terrible overexpenditure. When you think about how many times you’ll use the cookware, you’re really paying pennies per use!

  17. We usually try to plan for them as best as we can. If we know about them ahead of time we adjust our spending in the months prior to make up for it. Setting a yearly budget I find helps keep things on track too.

    If we don’t know about the purchase than it often qualifies under an emergency and we use our ER fund.

  18. Ps: Sorry I haven’t been around your blog much for a while. I got really swamped but I am now back in action.

  19. If it’s truly a ton of money, then I tend to research the purchase online. I am usually pretty thorough since Im in the mindset that I can beat almost any brick and mortar store price by shopping online. I then vigorously search for a discounted gift card or online coupon to whatever store I purchase from!

  20. I definitely tighten up my purse strings after making a large purchase. I don’t like to spend money anyway so for a purchase that has to be made, I am already whining.

  21. Tons and Tons of research and then fold and buy the cheaper option LOL

Trackbacks

  1. […] you one year, then touts its benefits after new studies several years later.Sustainable Life Blog: Big Purchases – Does making big purchases cause you to spend more than you normally would have […]