Whether it’s a lavish lifestyle, a luxury experience or an exotic products, we have all desired something unaffordable. Sometimes, just the fact that it’s unattainable makes us want it even more. How do we cope with it when it happens? Here’s my version of this last night.
Off and on, my wife and I would look at houses. No, we don’t plan to buy one yet, but we are slowly narrowing our focus by learning about our preferences.
Last night, we saw an area that we really liked. It might be the views, it could be just the photos of the house or it’s possibly the school district, Two things for sure though - we fell in love with it and the selling price was too high.
Okay, so it’s $200,000 (at least) over our tentative budget. In many areas of the country, you can actually buy a whole house with that lump sum!
Then I thought about this some more, and realize that it’s not the end of the world. I came up with several remedies to deal with unaffordable purchases.
- Figure Out What that Experience Gets You - Knowledge is half the battle. Know what that expense will get you go a long way in understanding whether it’s really necessary. Does that Porsche or Gucci bag fundamentally make your life better?
- What About Alternatives - Does the extra $200,000 dollar, or $1,400 per month for 30 years (approx. with 6% interest and 1.25% property taxes) bring you more joy other than the instant gratification? With that sort of cash, you can pay for tons of “instant gratifications”. Is that better?
- Search Your Past Experience - It’s not the first time this occurred. What happened when you fell victim to your impulses before? Has it worked out or did the excitement die down with you holding the huge bill? Was there no regrets about it or did you really wish you hadn’t take the plunge? Organizing your thoughts can sometimes give you the answer you are looking for. At the very least, it will give you an insight into what works or doesn’t work for you.
- Know Your Goals in the Outset - If the purchase is necessary and you are just looking at a product that is too expensive, knowing your goals with this purchase really helps. The reason why I want a house is for stability and a comfortable place to raise a family. Does that extra $200,000 get me that or is it merely bigger and thicker granite counter tops?
- You Can Still Afford it, Someday - As my mom once said, “it’s not where you are but where you are going that matters”. You might not be able to afford it now but what’s to say that you cannot afford it in the future? Maybe flying that private jet to Paris is just the motivation you need to achieve your financial goals.
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