Recently a friend needed to buy a new, bigger car seat for his young son. This was an essential item, but they’d not specifically set aside money for it.
At the shop there were three price options: around $100, $350 and $600.
‘From a budgeting perspective how do you decide which one to buy?’ my friend asked me.
When you’re trying to work out how much to spend on an essential item here are some useful questions to ask yourself:
- If money was really tight which one would you buy?
- If money was really really really tight, which would you buy? Or what would you do?
- How do you know money’s not as tight as that for you?
- How do you know the money sitting in your bank account really is ‘spare’?
The only way to know if the money really is spare is to have a clear plan to afford your goals and commitments, and know you’re on track.
Without that we’re only guessing what’s affordable.
If you aren’t on track or don’t have a plan then perhaps buying the cheapest option is best. Otherwise, you may (probably) be trading off affording something else that is very important to you, you just don’t realise it yet.
And if you don’t like missing out and don’t like buying the cheapest, then perhaps it’s time to implement a thorough plan of what’s affordable.