Are there times when you should go ahead and splurge? Do you need to live your entire life on a budget, buying inexpensive items? When is it okay to spend a little extra, and when should you not? If you have been intent on saving money and getting out of debt, it may be difficult to let yourself spend a little extra money. Here are four questions to ask yourself.
1) Can you pay cash for the item? If you answered yes, then you should be fine purchasing the splurge or upgrading your purchase. If you answered no, then you should not go for the top-of-line model. Often you will begin to resent the purchase when you end up paying for it over the next two years.
2) Is it a special occasion? It is nice to give well thought out presents; there are times when it means more to give a more expensive item. You may want to give your wife a diamond bracelet for you anniversary or buy a nice gift for your child’s graduation. Similarly you may be planning your dream vacation, and you know that this is the only time that you will travel to that particular place.
3) Will the more expensive item save you money over time? There are items that you buy and expect to last for a long time. If the item is more energy efficient, or will last a significantly longer amount of time, it may be worth the extra money. Be sure to calculate these costs carefully.
4) Do you really need the item? Sometimes you really do need the more expensive item, but if you are wavering between a 36 inch and a 40 inch wide screen television set does it really matter which size you get? If you answer yes then consider the price difference and ask yourself if that extra 4 inches makes that much of a difference to you.
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