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Spend Now or Save Now: An Age Old Dilemma

Lazy Man and I Have Plasmas, We Are Not Crazy…

Lazy Man penned a post in which he talked how he owned a plasma television and how personal finance bloggers called him crazy [3] (technically, he only supposed that pfbloggers would call him crazy) and I’m here to back him up, I’m a pfblogger who wouldn’t call someone, with a plasma television, crazy. I would call that person foolish if they put the whole thing on a credit card and planned on paying it off over the next 234908230943 years at 203984230% interest (that’s quite a bit!), but I wouldn’t call them crazy.

See, I recently got into a discussion with my fiancee over the idea of spending now versus saving now. She wanted to save more now, I felt like we were saving enough, but she was just worried of the unknown that is the future and whether we were being foolish for buying too much stuff now. It’s a perfectly reasonable concern because not many people have nice televisions or nice cars and so if you spend money on those things, you’re wondering if you should be saving it like everyone else (reverse Keeping Up with the Joneses!). However, you need to strike a balance between save now and spend now because an unreasonable emphasis on saving now is just as bad as spending now, but because it’s less common it is not discussed as often.

Once we worked out the saving versus spending concerns, the next real concern is whether you’re able to make the purchase in the first place. If you are putting it entirely on a credit card that you can’t pay off by the next billing cycle, you probably don’t want to be buying a plasma television. If you know that you’re taking advantage of a 12-month Best Buy 0% financing offer and won’t be able to pay for the whole thing in 12 months, you probably shouldn’t buy it. If you could, but don’t so that you can take advantage of special offers, pay for the whole set right now with cash from your bank account without compromising your financial situation, then by all means enjoy your television.

One final thing to remember, with technology the prices are always falling. If you want a $2000 television and you only have $1500, just wait a few months and by then you’ll have padded that television fund up to $1700 and the television will have falled in price to $1700. A win win!