If you can't pay for it, don't buy it.
That's what a friend told me the other day when I mentioned I blog about money ;) It's such a simple line that I couldn't resist sharing... "If you can't pay for it, don't buy it." Yes, I like that.The only problem with these sexy one-liners, though, is that it's much easier to say/think than to actually DO. Or hold yourself accountable for that matter. What does "I can't pay" really mean to you? That you don't have enough cash in your pocket? That your credit cards are maxed out? That you're over budget and afraid J. Money will yell at you (I wouldn't, but I like the way you think)? There are a ton of ways you can opt out here by simply saying it doesn't apply to you.
But what if we cut up a sticky and plopped it right there in your wallet or purse? In big black sharpie it would read "Sure you want to buy that?" What do you think would happen if you saw that every single time you took out a credit card or dug for cash? I know it would get ME to stop and think for a quick second or two. I'll probably continue on buying whatever it was I wanted 95% of the time, but at least then it's a conscious decision I'm making ;)
I guess what I'm trying to say is that these awesome sound bytes & ways of thinking are great to ponder from time to time, but we'll usually forget it the second we click away. You make it into something actionable though, and you never know what might happen!
posted by J. Money at
7:28 AM
27 Comments:
I do something similar to this except for I ask myself a series of questions.
Do I NEED it?
Is there something else I NEED more?
How would my life be affected if I didn't buy it?
You'd be surprised to find out that I put back more than I buy. I do not neglect what I need, but I am very critical of my purchases most of the time.
This is not to imply I never splurge because...ummm...well I kind of just did. ;) J, I just purchased 2 skateboard decks at a discounted price on ebay. Wait until you see what I have in mind. Hint: "Custom" board...
Have a great Monday my friend! I hope you had a fantastic Thanksgiving weekend!
I have a tendency to pick something up, wonder around the store still 'shopping' for about 20 minutes or so and I usually have talked myself out of 'needing' it by the time I'm ready to leave.
In college I also got in the habit of leaving most of my money (all but about $10) at home when I went to the mall. I would shop for a few hours, find a few things I really liked. But in the end I had to decide if it was worth going all the way home and coming back with the money to buy. Most times it wasn't :)
I'm like you J. A sticky note would make me think about it for a second but if it is something I really want, I would probably buy it anyway. This is one of the main reasons I set aside money in my budget to cover the occasional splurge.
The only way some people can stick to that very simple bit of wisdom is to not carry credit cards with them when shopping. Brandi's solution can be applied for anyone's budget, whether you start with $10, $50 or $100 in your wallet. Even if you do opt to go home or to the ATM for more money, the worst you could do is go broke. But you wouldn't be taking on credit card debt that could easily double or even triple the cost of your purchase once you're through paying the interest charges that mount each time you opt for the minimum payment rather than paying in full.
BTW I'm putting up a link to this on my blog.
That's what I follow. No money, no buyey. I haven't had credit cards in 5 years now.
Seems simple enough yet most people don't follow this mentality.
I think it's a good question to ask yourself. This is where I get in trouble each month with my budget (this will be part of a post I'm hoping to finish today or tomorrow). After expenses and amounts going to debt reduction and savings, I allot myself a certain amount of money to spend every month, but when expenses come up, whether legitimate (i.e., charitable contributions, wedding gifts, etc.) or not (i.e., random dinner/night out), and I go to the credit card, then that's another $X that come out of my debt reduction fund. It gets into how you define "afford," as I have the money to pay for these things...it's just delaying my getting out of debt. You definitely have to stop and smell the roses sometimes, so I'm with you on the "95% of the time" figure -- but I could definitely stand to tighten the belt a bit.
Yo J - I think you have to revise the title to "If you can't pay CASH for it, don't buy it." Given easy credit, most people can pay for anything, yiiihaw!
I test drove a beautifully black 2006 Porsche 911 Carrera S yesterday. SOOOO sweet.. and $55,000 cheaper than new ($100,000)! Good value right at $45,000?! Well, the problem is I don't want to donk of that cash, and + my garage can BARELY fit two cars tandem! lol.
BTW, highlighted your lottery post in my latest Katana wrap. Check it out.
yep, if there's no cash, there's no purchase. i don't even know how much credit i have available ... with all of the card companies reducing balances, closing unused accounts, etc, i just refused to keep up. i guess you can say i'm not interested. hahaha. so yeah, not affording something to me means that i don't have the money to pay for it, in full, now.
@Brad Chaffee - An "Enemy of Debt" board?! Cuz if so, I know exactly what I want for Xmas ;) Actually....you meant 1 board for E.O.D. and one for BudgetsAreSexy, right? RIGHT?! Haha...keep up that passion my friend.
@Brandi - Not a damn bad idea at all, I like that. In fact, I'm pretty sure I might have recently done that w/ this pair of shoes I wanted. I carried them around for 45 mins and then just put them back. They were on a crazy sale, but the excitement wore down over time and I really didn't need any more shoes anyways ;) Make sure to forget this comment when you read tomorrow's post. haha....
@Single Guy Money - I like the way you think! I def. do that - I have a "random" slot in my budget for exactly the same.
@Ariella - "the worst you could do is go broke." very interesting way to put it...going over to check out your post after I put this up - thanks :)
@sioux city used cars - Wow, that's impressive! As much as I'd like to think I could do without, I really wonder what would happen if I cut all my cards up. I never carry any balances or anything, but it would be interesting to see how long I could last.
@craig - You got that right brother. Kinda like "Buy low, sell high" ;) (PS: I stole that from you Ariella - just took a peek at your blog)
@thirtysomethingfinance - Hey, at least you're on top of it. That's more than we can say for a lot of others out there unfortunately.
@Financial Samurai - Oh do I hate you so much right now ;) You'd totally pick up that Porsche if you had a lot more in the bank, wouldn't you? I know I would! Well, maybe not an '06, but at least in the 00's. It's def. fun tempting yourself every now and then though, good work.
@Ms. MoneyChat - You'll find financial freedom in no time w/ that mentality :) Keep it up!
And your friend's motto is exactly what I am practicing this holiday season. :)
I agree.. the concept of "afford" can be so varied. I personally am trying to cut back on all purchases involving stuff (i.e. not experiences or food).
Just think of how many finance books that are hundreds of pages long have been purchased and then their advice promptly ignored when everyone would likely be so much better off if they would just follow the simple advice that is the title of this post :)
@Ariella - "the worst you could do is go broke." very interesting way to put it...going over to check out your post after I put this up - thanks :) I don't mind your "stealing" because you always give me credit. I've been quoted with no attribution on other blogs, and that really is annoying. As an English instructor, one of the thing's I have had to teach is the research paper, which includes citation of sources -- even for paraphrases.
I definitely think that the definition of "afford" should be pay cash.
That said, I think the saying, like most one-liners, is too simplistic. Over the past few years, there have been plenty of things that my husband and I couldn't afford that we had to buy anyway. Like jeans that fit him, after he gained weight from steroids. Or new medication for $100.
Also, if you can afford it, does that mean you SHOULD buy it? Guess that's the problem with pith: It's short and sweet, but not helpful in anything but the broadest sense.
J - So the Porsche costs about $45,000 all in after taxes. How much cash would you think you'd need in the bank at your current stage in life right now to buy it?
Hmm I have 150k cash but my income is only 40k/year...Should I buy it?
Anon 3:23am - You asking me? Generally my rule is to spend no more than 1/10th your gross annual income on your car. So for you, the answer is no. Look for a great second hand honda civic for $4,000. Cheers
I'd probably need a good $300k in liquid savings to justify it myself. But you catch me on a time in my life when I'm all about adventure and "living it up", then I could slip at $150k. With no other debts on the books, mind you.
J,
Great observation. However most of the rest of the country appears not to be following this advice.
Gotcha. That sounds good. When you say no debt though, would that also include no mortgage debt (primary and rental)?
A $300k cash hoard sounds like a good nut.
I was originally thinking no mortgage debt, but I'd probably do it with or without to be honest with ya ;) Of course, that's IF I needed a new car and the stars aligned. I'd never just buy it for a 2nd one or anything..
OK.... the Porsche thing doesn't do it for me....SL500, now that would be difficult to pass up :-)
Being employed by MOI, I have two rules when I want to buy something:
1. 10% rule. When I "pay myself" I have a mad fund into which I put 10% of whatever it is that I pay myself that month. So if I was looking at a $45K toy, that would mean that I would need to pay myself $450K to warrant paying out cash for my wheels...
2. A small variation but on the same track, if I don't have $45K in my Mad Money account, then there is no porsche, if there is and I really want that Porsche, hey then why not? It's out of my Mad Fund and that is what its for. After all a girl has gotta have some fun!
.........or, we could all be like John Lennon (I think it was him) and go "write" ourselves a pool (or Porsche)
Now I'm depressed ... I just realized what I need to pay myself to get that SL500. Boo Hoo!
best............valentina
Not a bad idea at all w/ that Mad Fund! I like that :) And when you hit that $450k mark one day you let me know - we'll celebrate in style!
I write a note to myself on those sleeves that come with your debt card or credit card. For example, I'm trying to save $10,000 in an emergency fund. So, I have $10k written on the sleeve of a credit card, and it keeps me from making crazy, frivolous purchases that I don't really need. It keeps me focused on my financial goal.
NICE. That's what I like to see my brotha ;)
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