Updated on 11.18.09

Should I Save for Something or Not Buy It At All?

Trent Hamm

Andre writes in:

I’m interested in replacing a piece of home audio equipment that is experiencing occasional malfunctions, but works OK most of the time. The receiver I’m looking at costs $500 on Amazon. I’m a little conflicted. The more frugal side of me says to not even buy it. Make do with the broken receiver until it’s completely unusable. The less frugal side says to save up for it and buy a new one. That sounds perfectly logical and responsible. Save for a few months, instead of putting it on my credit card. The receiver I’m looking at is highly-rated and is considered a great buy for the price, according to CNet. I’ve done research and think this is a good value for what I’m getting, compared to other similar items. I feel like I’ve done everything right but still feel a little guilty in thinking of buying it.

This is one of the biggest challenges for a frugal person. When is it appropriate to just “make do” with what we have on hand, and when should we bite the bullet and buy a replacement? And when we do, is it appropriate to buy a high-end replacement, or should we just go for the best bang for the buck every time?

I think both questions come down to the same key factor: how truly important is this item to your quality of life?

Let’s look at Andre’s case. Let’s say Andre is a serious audiophile. Every evening when he comes home from work, he puts on a series of jazz albums that play all evening at his house while he reads, works on personal projects, and does housework. Perhaps Andre is even a musician himself. The music is one of his biggest passions in life – he can’t imagine an evening without that soundtrack to his life playing.

If that’s the case, Andre should maintain his home audio equipment. He should save up for that replacement component and he should buy a high-quality one that meets his needs.

On the other hand, let’s say Andre listens to his audio system once a week at most. He turns it on when there are guests over and perhaps he’ll turn it on on a lazy Saturday afternoon, but other than that, it sits there silent. He enjoys music, but it’s not his life’s passion.

If that’s the case for Andre, he should make do with what he has and, when it breaks, get a “bang for the buck” replacement for it.

I think this is largely true for everything in life. All of us have a few key central passions. Once you know what those passions are, it’s completely fine to spend a little more on it, provided you can afford it and can save for it.

The problem with overspending comes in when we begin to overspend on areas that are less important to us. For example, if Andre wasn’t passionate about music but he still convinced himself to drop hundreds/thousands of dollars on his home audio system, that’s probably a misuse of money. If he’s not deeply in love with the driving experience, dropping thousands extra on a luxury car probably isn’t a good use of money.

I’ll use myself as an example. I’m passionate about cooking at home. A big part of that for me is getting great, fresh ingredients. Thus, I’m willing to spend quite a bit more to get great ingredients. I don’t feel bad when I spend $30 on cheeses or I buy organic fresh produce or when I replace the old casserole I had in college with a top-notch French oven.

On the other hand, I don’t value having a perfect living room set. I’m more interested in something that’s simply comfortable. So I don’t go out and spend a ton of money replacing our living room set all of the time. It’s just not something I value beyond the minimum function of it.

In the end, I have about three or four key passions in my life that I don’t feel bad spending money on if I can afford it easily. Outside of those passions, I’m as tight as a drum.

Andre, the answer to this question really comes from you. How much do you value the audio listening experience? Is it something that’s central in your life, or is it just something on the periphery? That alone will provide the guidance you need.

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  1. Daniel says:

    It sounds like it’s something Andre does have a passion for, and despite our reassurances that it’s ok to buy because he truly would enjoy it, he is afraid of feeling guilty.

    Well, the solution sounds like don’t just save it from your paycheck, but cut back on something else for a few months. You can sell something you don’t need or cut back on restaurants until you get to the point where you can buy it guilt free.

    I hate this side of frugality, the side that makes me think that even though we are responsible, we feel guilty about buying things, even things that would improve our quality of life.

  2. leslie says:

    I would keep paying your CC debt but set up a small side savings for the upgrade. However, I wouldn’t purchase it until the one you currently have becomes completely unusable. Then just use the money you saved to buy the new one.

  3. lurker carl says:

    A bit more information about his finances is needed to reach a responsible conclusion. So here is a good question to ponder: Will your desire to purchase a $500 receiver still be a high priority after the credit card debt is gone and an emergency fund is established?

  4. Kevin M says:

    Totally agree with Trent about spending on your passions and eliminating the other clutter. That being said, $500 seems like a lot for a receiver. Are they that much different than ones at half the cost?

    What about buying a slightly used one from someone who upgrades often?

  5. Zella says:

    He’s not saying he has CC debt, just asking if he should save or not for something that isn’t an outright “need” nor entirely broken yet.

    Me? I say yes. My husband and I are definitely saving for things we don’t need, but want and enjoy nonetheless, and are sometimes upgrades to products we already have but which haven’t been destroyed yet.

    It’s like dog chew toys– at some point, it’s too small to find under the couch and probably a hazard anyway. It’s not all gone, nor is it definitively an issue, but you might as well replace it because they enjoy them a ridiculous amount and the risk of it soon becoming a hazard isn’t really worth it.

  6. George says:

    Trent provides good guidelines, but left out an option: buying used.

    > If he’s not deeply in love with the driving
    > experience, dropping thousands extra on a
    > luxury car probably isn’t a good use of money.

    I’m going to pick a nit with this poor analogy: a luxury car has nothing to do with the driving experience… they are all about distancing oneself from the driving experience. On the other hand, sports cars like the Lotus Elise & Exige are all about the driving experience and have few luxuries.

  7. For something like that I prefer to make do until it absolutely needs replacing. Many times by then I decide I don’t need a new one and move on with my life.

    But if it’s important to you, and you’ve got the cash, go get it. That’s how I’m ending up with a new TV this holiday season.

  8. Jim says:

    I don’t think we have enough info. If he has credit card debt and no savings then he shouldn’t buy it. If he has no debts and some emergency savings then saving up for something if he really wants it is OK IMHO. I’d also ask does he really feel a need to spend $500? Or could he get a decent alternative for less?

  9. Nik says:

    One way Andre might alleviate his guilt might be to get the component repaired if he can do so for a reasonable price. Maybe when he gets his debt under control, he can think about going all out.

  10. Jen says:

    The excerpt from Andre’s letter says nothing about him having any credit card debt. Am I missing something, perhaps posted elsewhere? Or is credit card debt so ubiquitous that it is presumed to be the default situation? Not trying to be snarky, just curious.

  11. Jessie says:

    I think it’s great that he’s saving up for it. I say save up the money, and if you still want it by the time you’re done saving, then go for it. That should be long enough to determine whether it’s just a passing phase. You may find that by the time you’ve got $500 you don’t want it so much anymore.

  12. Johanna says:

    I think Trent’s analysis is basically right, although I think the situation is a little bit more nuanced than dividing the world into “passions” and “not passions.”

    For example, I don’t know if I’d call listening to music a passion of mine, but it is something I enjoy. But I don’t value all aspects of the experience equally. I really like listening to music while I’m on the subway or out for a walk, so my iPod was one of the better purchases I’ve made. On the other hand, having a top-quality stereo system at home isn’t important to me.

    I think the big question is, “Will spending this money make me happier than not spending this money (or spending it on something else)?” And by its very nature, that’s a question that only you can answer for yourself. You can ask other people what they’d do in a similar situation, or you can ask others for help in looking at aspects of the situation that you hadn’t thought of, but ultimately the decision is purely up to you.

    And whatever you decide, please try not to feel guilty about it. Frugality is not morality.

  13. Meagan says:

    I had similar experience recently.

    The battery on my 6 year old iPod (3rd Generation, before the color screen) died, would not charge. It has been my main music system for about 5 years.

    I was torn between getting a new iPod ($240) or just getting a new battery and installing it($20).

    I ended up doing both, and it was less than the initial cost of my original iPod ($500). The new iPod is more reliable but by replacing the battery I can keep using the old one for home use until some other part breaks down.

    I don’t feel guilty at all, I expect the new one to last a comparable time and therefore be worth the money, and feel that if the old one last another year or more it is well worth the cost.

  14. Derek says:

    Maybe Andre should just wait until his current receiver dies while saving money for a new receiver at the same time. His current receiver could probably last six months or more; maybe even a year. By then, he’d have quite a bit saved up and the price of that brand new receiver will most likely be quite a bit lower – we all know how fast prices on technology drop. Not only would he have used his current receiver to it’s maximum life, he’ll be able to replace it cheaper.

  15. Laura in Seattle says:

    @#12 Johanna:
    Nearly every time I see a comment from you on this site, it’s not really a comment – more as if you are trying to write your own blog post on the same topic, with your own spin. Have you considered writing your own blog? Or if you already have one, can you post the link so we can check it out?

    I ask because whenever I see a person talking at length about how to build a better mousetrap, I wonder why they aren’t already out building it and making a mint in sales profits.

  16. kristine says:

    I think that defining your serious wants as a passion is good for this reason- if you just say it will “make you happy”, well, then, that’s a pretty good justification for buying just about anything. A passion is a higher and better benchmark for indulgences.

  17. laura k says:

    I agree with the suggestion to repair it. My receiver was acting strange, and I took it to a local electronics repair shop. $40 later, the receiver is fixed, the owner also made a couple other repairs “while he was in there,” and I was able to support a local business. I had lived with the problem for years but am glad I finally took it in when I did because 6 months later the owner retired.

  18. @ George, #6 — You are a man after my own heart. ;) Luxury and Performance cars are often confused by people who don’t know nor care much about cars.

    That being said, I waffled quite a bit when my husband came to me with a great deal on the new engine I wanted for my 240SX. I was going to pay off the car, but since decided to go ahead and purchase the engine instead. Why? Because I’m still doing fine on my original timetable for the loan, so I see no reason why I can’t be happy doing what I planned to do five months ago.

    I have no doubt that the money was well-spent, I just can’t wait to benefit from it. :) I try to not feel guilty, because, well, what good is money to me if I can’t bring myself to use it in such a way that increases my happiness?

  19. I can totally relate to this reader. I used to not even think about a purchase, if I wanted it I went out and bought it (except I did it with my credit card). I would promise myself I would pay the balance off in full when the bill came and that never happened. Before I knew it, I had reach the spending limit on my credit card.

    Now that all of my credit card debt is gone, I save up for those I save up for those occasional wants. I stil put it on a credit card for the rewards but the balance is paid off each month.

    The reader did not mention if he carried any type of debt other than a mortgage. If not, I say go for it.

  20. Strabo says:

    A receiver is usually something you use every day (at least in my experience) and which lasts – break-downs aside – a long time before being replaced (I know people who run their equipment purchased in the Seventies). A combination that is to me a sure sign to spend more money on a higher quality product rather than be frugal, or maybe even cheap. Things that last a long time and/or get used every day are the things I’d invest a bit more in.

  21. Oskar says:

    I am an audiophile and have spent a lot of money over the years on hifi equipment, I am also very frugal and as an example the high quality speakers I bought used 15 years ago are still in use in my home. The key is as Trent says to think about the need/passion. I agree that it is important to save up for these things I would never buy one with a credit card however I do not agree with the other comments above that $500 is a lot, rather I would say for a true auditphile this is probably ‘low end’/’lowest acceptable level’ equipment.

  22. reulte says:

    I would like to offer that Andre start saving for his new receiver AND check on how to fix his old one. I have a very rough calculation for myself for equipment that is malfunctioning – I take the cost of the new item ($500) and divide it by 10 (simply because it’s an easy number to divide by,you can get your own number). If that number is higher than my hourly salary, then I spend 10 hours on learning how to fix it or at least to understand how it works.

    Even it it ends up that I can’t fix it before I save the money to replace it, I learn a lot and usually sound like I know what I’m talking about when I take my car (or other item) in for professional work.

  23. If it were me, I would really dig around to see if there was someone in my circle of contacts who may know about fixing this type of equipment to see if he could find out what was really wrong with it. Maybe, its an inexpensive fix.

    Next, if this story is current, I wouldn’t buy a thing till Black Friday. I wouldn’t venture out in the malls or anything that day, but I know he could get a deal on something online.

  24. Jules says:

    It’s a bit harder for me to decide on this–I love photography. I’ve used my P&S for several years now, and am more than ready to upgrade to a DSLR. I could probably afford the camera, but the lenses I’d need are out of my price range. Not to mention that I rarely have the time to go out for the hours upon hours I’d need to wait for something to pop up. So…I just don’t know. Of course, it’s a moot point at this moment, because I simply don’t have the resources, but if I were to save up a decent amount over and above the cost of the camera and lenses–well, I’m not sure I could bring myself to get it.

  25. Jules says:

    It’s a bit harder for me to decide on this–I love photography. I’ve used my P&S for several years now, and am more than ready to upgrade to a DSLR. I could probably afford the camera, but the lenses I’d need are out of my price range. Not to mention that I rarely have the time to go out for the hours upon hours I’d need to wait for something to pop up. So…I just don’t know. Of course, it’s a moot point at this moment, because I simply don’t have the resources, but if I were to save up a decent amount over and above the cost of the camera and lenses–well, I’m not sure I could bring myself to get it.

  26. Dave says:

    I agree with Leslie #2 with this, it is a planned thing, maybe what is wrong will stay just as it is for the next 20 years, or it could go tomorrow, if that ammount is in the bank, no worries, kinda like Trent and his car loan, if something happens it’s covered,
    So basicly add $500 to the emergency fund, then if it goes no biggie, if he can find a great deal(Ebay, craigslist,,,,,) jump on it then.

  27. GayleRN says:

    Save up the $500 in a separate account of some sort even if it is an envelope someplace. When the $500 is there make a decision.

    In my life if it is worth spending that amount of time thinking about it, it is worth doing something about it. One of my criteria for a purchase is that it is making my life less happy because the situation is using up my time and energy thinking about it or working around it.

  28. I used to really struggle over every substantial purchase I would make that was not necessary. Like Andre, I would go back and forth over which option to take. Even after saving for the item and then finally purchasing it in a “responsible” fashion, I would need a lot of reassurance that it was OK, and that I was not wasting away mine and my wife’s money.

    Earlier this year, we started giving ourselves a monthly allowance, and I don’t have those types of controversy anymore. I put a set amount of money every month into my personal bank account, and I am free to spend it (or save) on anything I want. So, if I were in Andre’s case, I would save that money until I had the $500, and then buy the new item. Since it would be “my” money that was set aside for fun stuff that I want, there is no more conflict!

  29. Nik says:

    @Jen, I think we find ourselves talking about the credit cards because he seemed apprehensive about putting the stereo on the card. It could imply that he didn’t have the cash outright for it or he had enough on his card that he might feel guilty about adding to it.
    Some people often put things on the cards because they have lucrative rewards programs that pay off better than leaving the $500 in savings. If adding to his balance makes him loathe to buy the item, it may be that he should go without or look into repairing it until his situation improves even if he is an audiophile.

  30. Louise says:

    Another thing to consider is whether the older item still has some resale value. If it still works okay and the technology isn’t obsolete, see what it is worth on eBay or Craigslist. Sell it while it still can be sold and apply that cash toward purchasing the new item.

    This has two advantages: first, it reduces the cost of the new items, and more importantly to me, it keeps a completely busted item out of the landfill.

    You can argue that the item will still end up in the landfill eventually, but often the sort of person who buys used electronics is savvy enough to fix small problems themselves.

  31. Kevin says:

    @Foxie (#18):

    “I was going to pay off the car, but since decided to go ahead and purchase the engine instead.”

    Wait … you bought a new engine for a car you’re still making payments on?

    Am I reading that right? Maybe I’m misunderstanding, and there are 2 cars – one that is paid-for but needs a new engine, and another one that works fine but is still being paid for?

  32. I believe that if we hesitate before buying things, we’ll spend less, and have less debt. We buy impulsively things that we really won’t use.

    John DeFlumeri Jr

  33. Caroline says:

    Trent, sometimes your answers are so spot on.

  34. Being in the consumer electronics industry on the installation/service side, I can definitely say that a $500 receiver is low-end. :-) To get a mid-line receiver retail with networking capability to hookup to your PC if you have digital content, for example, will cost you $1,000 or more. For $500, you’ll get a nice sound with a decent amount of inputs. Fine for a stand-alone system. I can also say that depending on what’s wrong, he’s much better off saving the $$ and buying a new one versus trying to fix the old. Just like lots of other things, electronics are designed to fail so you’ll buy new. We all know that in a few years the inputs will be different and other specs will change, thus many manufacturers don’t bother with replacement parts. I’ve seen things like projectors unable to be fixed less than 5 years after purchase because the parts are not available!

    If this is recent yes – Black Friday for the win! Just be sure to read reviews and don’t get sucked-in to anything else while you’re at the store! :-)

  35. @Kevin #31 —
    Nope, you got me right… Car’s being paid off, but she’s getting her new engine. We’re retiring a 300k mile, 19 year old engine and transmission that’s seen quite a life… With an extremely sparse maintenance history. She’s been great so far, but I tend to not push my luck.

    Then again — according to my original payment schedule (not the loan’s terms), she’ll be paid off by next summer. Quicker now, I’ve decided. And the loan was to further build my credit score… I can’t see how much of a benefit it is to have a six month car loan. (Need history & to show good payment management.) Also only $112/month, and I was fine with the interest that would be paid over the entire life of the loan. (Two years, cutting it to one.)

    We’re doing it now, too, so we can do it ourselves and spare the labor expense. Not sure if it’ll need to be tuned or not, I don’t think so though.

    There are actually three cars in this house, but that’s a whole other story…. Most people have a hard time understanding, but anyone who’s passionate about something, anything, can understand on some level. ._.;

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