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

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.