Have you ever made purchases you later regretted? Me too. I have written several posts about my Airstream purchase – one that I would have been better off avoiding.
Let’s say you have planned and dreamed and saved for that car or TV or leather couch. Good for you. But slow down a bit before you buy. These safeguards* will help that purchase be one you love today and not regret tomorrow:
1. Wait overnight before making the purchase.
You have already been waiting for weeks or possibly months. It won’t hurt to wait one more night. As you are doing so, ask yourself one more time, “Is the Ipad worth the money?” Why wait overnight? To make sure that your purchase is based on your buying criteria and not the emotion of the moment.
2. Carefully consider your buying motives.
I know. You have been thinking and dreaming about owning this item for some time. Great. But before you plop your money down, review your motives one more time. If you think that this purchase will make you happy or impress your friends, you have the wrong motive.
3. Don’t buy anything you don’t understand.
That new hybrid car or the latest computer might be exactly what you need; just make sure you understand what you are buying before you get it home. I wish I had understood what I was getting into before buying that Airstream. I thought I did, but it turned out to have many more problems than I thought.
4. Consider the “opportunity cost” of your money.
Opportunity cost simply means that the money you spend for this item is money that can’t be spent on something else. For example, if you purchase a $15,000 car, you can’t put that same $15,000 into a retirement investment. The car will be worthless in a few years while that investment, if it grows at an 8% annual rate, will be worth over $328,000 in thirty years. Something to think about.
5. Communicate with your spouse.
Even if the two of you have agreed to this purchase, you need to continue discussing it. Why? Because sometimes circumstances or priorities change. Be sure to voice any misgivings BEFORE parting with your money. Once the money is gone, it is too late.
I hope you will not only be able to make that purchase you have dreamed of, but also be able to look back later and be glad you made it. These tips will help.
Readers: what purchases have you made that you later regretted? If you knew then what you know now, what would you have done differently? Any other tips for getting power over purchase?
*The five tips came from Dave Ramsey’s Financial Peace University program. The comments are mine.
The last expenditure that I regret is fixing my ’98 BMW Z3 in March. We spent about $1,000 to fix the water pump and a couple other things and was hoping the car would last another year or two. However, the head gasket cracked in July and we decided not to fix it. The car was in good shape and had less than 100k miles on it so we were able to sell it off for $3,000.
I shouldn’t have fix the water pump and probably could have saved the 1k repair and made additional 2k selling it. Oh well, hindsight is 20/20.
My tip on gaining power over spending is to pay in cash. Nothing deters spending like handing over a bundle of cash. 🙂
@Retire,
You had no idea that the head gasket was going to crack when you fixed the water pump, but it is scary sometimes how cars seem to self destruct as soon as we spend money on them. I have a 99 Cadillac in perfect condition except for a leaking head gasket. It may require a new (rebuilt) engine and I am contemplating putting one in.
Yes. Paying cash is a great way to keep control over your purchases…something we do.
Joe, I agree with retireby40, it hurts to part with that cash. It seems auto repairs are on the top of the list for money regrets. I have a 2001 Ford van that has a intake manifold thats nothing but trouble.
I have avoided regrets by following your number one rule. People get into so much trouble by getting the fever for a car, boat or timeshares. I usually drive my wife crazy by taking to long, according to her, to make a big decision.
But remodeling the house is my worst offense. Remodeling the bath room can give you the fever by picking out too expensive tile or fixtures. Everyone need to slow down a bit and talk it over.
I would also add trying to find the cheapest price for that item to the list. (Coupons, discount codes, etc.)
Hmm… buyers remorse… I think the cruddy surround sound system I bought when we remodeled our family room in our last house. This was a classic example of not knowing what you were buying, and I was young and stupid. It was Sony, so I assumed it would be great. I was wrong, everything sounded ‘tinny’.
@Dave,
Remodeling “fever”. Wow. I hadn’t even considered this one, but it is an easy way to overspend. Our simple bathroom project a few years ago ended up costing twice ($8,000 instead of $4,000) what we originally estimated. With me doing the work!
@Everyday Tips,
Your Sony example is a great one. How many of us pick something based on brand name instead of really investigating to see what we are buying? Fortunately, we can learn from our mistakes. Buying something you don’t understand can be a big one, but I have learned much from purchasing that Airstream I didn’t understand.
#3 is so key – especially in the blogging industry. It seems like bloggers (at least in the problogging/Internet marketing fields, which I also blog in) can’t scoop up the latest gizmo fast enough. Case in point: the iPad. I talked with people online who bought the iPad just to find out what it was. That’s a CRAZY train of thought, right there.
I think there can be a bigger issue here though – the issue of learning to be content. It’s a lesson I am reminded of on a daily basis, when I see something new and cool being advertised at me. We need to learn to examine WHY we want what we want, not just how to get it.
As far as purchases I regret – my husband and I went through a serious Wii game buying phase a year or so ago. Oh the money spent on things we don’t even use (and have mostly sold, for half the price).
Understanding what you buy before buying it is often overlooked and needs to be overemphasized. Why? Because we THINK we understand it and then, after the purchase, we discover that we don’t. I plead guilty…many times.
About contentment: GREAT point. 1Ti 6:6 reads “Yet true godliness with contentment is itself great wealth.” True contentment can actually liberate us from the allures of advertisers. Asking why we want something (as you said) instead of how to get it is a great technique. Sleeping on it helps too.
Thanks for your insightful comments!