I should tell you I really hate spending money. When it comes to big purchases I usually call my accountant and ask, “can I afford this?” She tells me I am just like my dad. Which is funny and also so true.
For business purchases like my computer and camera, trips I think about it as an investment in the future of my business. Will this help build my business and is it a good investment?
There is a quick and easy formula for all big purchases I like to use.
Cost Per Use
The camera and computer are a quick yes when it comes to making my life easier and better. I typically hold onto a camera for 3-5 years and use it almost daily. My computer is around about 3 years and that is an essential part of my business. So going for the extra hard drive or memory is a quick yes even though it takes the ticket price out of my comfort zone.
If you think about that dress you really want or bag you have your eye on, will you wear them a lot? Or is it an occasional piece you will pull out once or twice a year? Take the total price and divide it by the number of times you will use the piece. Is it still worth it?
*Most importantly, I go by the rule that if I don’t have the cash to pay for something then I can’t afford it. It helps control my spending when it comes to a large purchase. I do put large purchases on credit cards for the extra insurance provided for trips and electronics. I make sure to pay off my credit card each month.
I hope this is a helpful post. I would love to know if you have any financial helpful tips.