Don’t buy something unless you have the money in your pocket. That simple sentence is great advice, meant to keep a person from overspending. But having the money to buy something after sacrificing and saving, even after all your bills are paid, may not be sufficient. Personally, I like to oversave large purchases.
My wife wanted to order some products online that amounted to a significant amount of money. Knowing we have more discretionary funds in the second half of the month, she asked if it would be better to wait until our middle of the month paycheck. She was puzzled when I suggested we wait even longer.
Benefits Of Oversaving
By waiting until the beginning of the following pay period:
- Scrub Order : In the next couple of weeks, my wife can scrub her order, honing it to contain only those items the give her the most value. A waiting period helps weed out purchases that don’t provide value equal to the cost.
- Bulletproof Budget : We would have the cash to make my wife’s purchase as soon as our middle of the month paycheck hit the checking account without affecting our bi-monthly budget period. However, that may back us into a financial corner if something unexpected comes up that would be more worthy of our discretionary funds. Instead of riding through the budget period with only our emergency fund to carry any unexpected needs, we’ll stash away the funds for her purchase. If we get the next budgetary infusion at the beginning of the month without spending the money, then we will we push go on the purchase. Or, we could keep saving money until we’re comfortable letting go of the funds and make the purchase.
In other words, I want to oversave the purchase.
This allows us take the time to evaluate the purchase, ensure we have the cash to make the purchase without leaving our bank account completely depleted from the large purchase.
How about you, EOD Nation, do you make large discretionary purchase as soon as you have the money, or do you wait even longer? How do you decide when the right time is to make such purchases?