Save More: Buy What You Need Versus What You Can Afford

posted by Andrea | 04/7/2017
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As I mentioned a few weeks ago, I’ve had the luxury of watching HGTV for the past month due to Dave’s Sling TV membership he purchased to watch March Madness.

I always get so excited to watch HGTV… but honestly, after 2-3 weeks, my cravings are sufficed and I’m ready to go back to my normal life of almost never watching TV (Netflix) after the kids are in bed.

I quickly tire of the same-old, same-old scenarios:

  1. It looks like you’ve been pre-approved for a max budget of $xxx,xxx.
  2. Let’s look at 3 different houses.
  3. The first 2 come in under budget but aren’t “perfect”.
  4. This next house is over your budget but it has EVERYTHING you want.
  5. OK, let’s go with the house you can NOT afford so you get EVERYTHING you want.

Dave and I sit and stare in awe as these people (many of which are our age with young families) are burdened with gigantic mortgages and additional mortgage insurance because they can’t even pay the 20% down-payment on the house that was over their max budget… but is just so “perfect”.

What’s the point of having a “max budget” if you are going to spend more than that amount anyway? 

Just think how much money these people could save if they focused on simply buying what they NEEDED in a house versus all the things they wanted?

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Now, obviously that’s somewhat of an extreme example — but the concept holds true for so many different areas of our lives.

  • Yes, maybe you can afford another pair of jeans… but do you really NEED it?
  • Yes, maybe you can afford to buy your child that toy, game, techie thing, etc… but do they really NEED it?
  • Yes, maybe you can afford to go on a super fancy vacation… but do you really NEED a super fancy vacation?
  • Yes, maybe you can afford to buy a brand new car off the lot… but do you really NEED a brand new car?

Of course, we wouldn’t have very full lives if we ONLY allowed ourselves to buy exactly what we needed to survive and nothing more. It’s fun to splurge a little every now and then, it’s exciting to try something new “just because”, and it can be a special treat to do or buy something we might not normally do or buy.

But I do think we (myself included) could all save a lot of money if we simply stopped to ask “Do I NEED this?” versus “Can I AFFORD this?”

I would hope that if we can’t afford something, we would turn away immediately… but even if we CAN afford something, I don’t think that necessarily means we need it and should buy it.

Does that make sense? 

So often, our society obsesses over what we can “afford” that we forget to think about the fact that we most likely NEED far less than we can actually AFFORD.

We save so we can “afford” a bigger house or nicer car. We invest so we can “afford” a better retirement. We accept a promotion at work so we can “afford” to send our kids to a private college or go on fancy vacation.

Even many of the frugal, money-saving blogs talk frequently about not spending more than you can “afford” — but there are so many situations (at least in my own life) when I think “good grief, I totally do not NEED this, even though I can easily afford to buy it.”

Again, I want to reiterate that I do NOT think we should deprive ourselves of every nicety and fun “extra”, but I do think we could all pad our savings account a bit more and simplify our lives if we stopped to evaluate our actual needs versus what we can afford to buy.

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22 comments

  1. Links I love in April - A Fresh Start on a Budget

    04/11/2017

    […] A great post on understanding need vs Want […]

  2. Maggie

    04/07/2017

    So true.

    Too many young couples think that they should start out with the house that their parents spent their lives working to achieve.

    I preferred to start small, pay off the home loan quickly, and then upgrade as needed. I bought my first home as a young single, spending less than half of what the banks were willing to lend me. Less money borrowed meant lower repayments, which meant I could afford to pay double the minimum repayment, and my loan was paid off in less than five years.

    Fifteen years and three homes later, I’m now married with small children, and we finally have our dream home. Most importantly, we’re debt free, which is worth all The ‘making do’ over the years.

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    Andrea Reply:

    this is awesome! Thanks for sharing Maggie!

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  3. Christine from The (mostly) Simple Life

    04/07/2017

    This is such a smart way to think.

    We just bought a house and we didn’t even pay attention to what the bank said we could afford. We knew how much we wanted to spend and stuck with that.

    Even when I go to the thrift store, I try to take stock of what clothes that I actually need. Even though it’s cheap and I could afford it, I don’t need any more pairs of jeans!

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    Andrea Reply:

    somehow, this doesn’t surprise me 🙂

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  4. Alissa

    04/07/2017

    I know that I have the personality trait of once I see something, I want it! So when I tried on wedding dresses when I was engaged, I would ask the price before I tried it on (if it was out of my budget, I would refuse to try it on). I know the cost of the vehicle before we test drive it. We are currently renting, but if it comes to buying a house some day, I KNOW that I can only look at ones in our budget – once I am tempted by something nice, it is so so so hard for me to say no. So I refuse to look unless I know we can afford it. It feels like so few people live this way – thanks for the encouragement Andrea!

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    Andrea Reply:

    good for you for knowing this, accepting this, and taking steps to avoid temptations. I’m sure your budget and your savings account appreciate it 🙂

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  5. Jean

    04/07/2017

    Coming at this from the perspective of an almost retired person — you can’t have it “all” and keeping up with the Jones’ is very defeating. We get so busy or caught up in the drama and busyness of life, we don’t stop to think for the long haul.
    If I could have back even a fraction of all the “treats” I purchased during my working career, I would rolling in cash. 🙂 The little things do add up.

    That said, now that we are almost retired, have no debt, have saved or paid for college tuitions, we now feel really weird when we “spend” what we can now afford. It’s actually uncomfortable, but still nice, to purchase and furnish a second home — this time being more sure of what we really “need” and only getting that. I would love a “small” house — that is a “smart” house — that only has what we need – built-ins, a practical and well though out floor plan instead of mega-spaces and drive-through closets (lol).

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  6. Meghan

    04/07/2017

    Great post! In our family we practice wise spending and live well below what we could “afford.” A couple we’ve been friends with for 15 years have been spending what they really can’t afford. We are close enough friends that we know how much debt they have. When they tell us about a fancy vacation they are taking, I have to fake being excited for them while inwardly freaking out. We’ve told them things that work for us financially and some of people in finance we follow but never push it. I’m thinking this is my own personal issue, and if they are happy with their situation I should keep my mouth shut, right?

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    Andrea Reply:

    oh it would be very difficult for me not to be judgemental of those friends (or push my thoughts on them). Good for you for doing your best to leave your own opinions out of it!

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  7. Kristin

    04/07/2017

    So so so true! i really wish I had figured this all out 10 years ago.

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    Andrea Reply:

    glad you’ve figured it out now though!

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  8. Debbie

    04/07/2017

    Well put Andrea! So many times I go through this question when I contemplate on buying something. Sometimes (who are we kidding, often) I give in because I feel it’s been a while since I treated myself. Those big purchases are the ones that really stop me from my tracks. I so like your last paragraph and we could all use to pad our savings account a bit more and simply if we only ask these questions more before buying something.

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    Andrea Reply:

    yes, I don’t think you are alone in this either. I’ve had more issues with it since having kids — mainly because Dave and I almost never get out and do anything anymore because it’s too much hassle to find babysitters, etc. So I’ll see something I “want” for the house or for the yard and think “we never spend money on ourselves, we can afford this” so I buy it.

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  9. Kellie Denton

    04/07/2017

    Wonderful post! I get frustrated with HGTV also…I try to remind myself that after the cameras stop rolling they’re usually left with a beautiful home…with no furniture and a giant mortgage! Helps to put things in perspective.

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  10. Debbie Sanders

    04/07/2017

    I wish I would have had this wisdom at an early age. We would be in such a better place financially. At least I know it now. I so hope your younger readers take this advice! This blog is such a good role model for others! Can our government please read this too? Lol!

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  11. Katie

    04/07/2017

    I always say that HGTV’s version of “starter home” is a whole lot different than mine! 🙂 I can easily become discontented if I watch too much HGTV also. Only in small doses!

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    Andrea Reply:

    haha — yes! Also, I can’t believe how expensive some areas of the country are. I feel very fortunate to live in a lower-cost-of-living area!

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  12. Linda M

    04/07/2017

    Excellent post! I like to think of it as spending tomorrow’s prosperity. I am as guilty as the next person….and have learned a lot through the years….have lots more to learn. It is a vicious cycle of competition among the young familes….keeping up with the Joneses…when often the Joneses are way over their heads in debt and stress over buying things they can’t afford and loses its glossy allure soon after purchase. Andrea, you are wise beyond your years! Thanks for your posts.

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    Andrea Reply:

    oh this is a good way to look at it Linda! Thanks for sharing.

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  13. Stephanie

    04/07/2017

    So true! I have to remind myself of that when I become discontent in my 1000 soft home. Yes would a larger house be nice for our family of 6? Of course, but do I want to increase our debt load and downgrade our savings while sending our children to a Christian school? No, and the school is more important to us than a fancy house. That being said, we definitely could evaluate some of our other spending more often and maybe we could open the door to other possibilities .

    I’m bummed HGTV isn’t on Netflix anymore. I really only like to watch fixer upper, because that show is a whole lot less dramatic than others on HGTV. But oh well, not worth the TV subscription plan for us.

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    Shiloh Reply:

    Sometimes it’s on YouTube

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