How I Justify Large Purchases

Do you ever see something and want it with every fiber of your being...but the price tag makes you cringe? True to my bougie Taurus roots, I love nice things. But I'm also frugal and if I'm putting major money into something it has to be worthwhile. After my recent purchase of Apple AirPods Max, I knew to feel good about the sale I needed to be able to justify the money. Otherwise $500 on headphones feels ridiculous. I'm breaking down how I justify large purchases and some tricks I use to get the best deal.

How often will I use it?

Marketing sells us expensive products that seem like they will solve a life problem, but sometimes they're just a shiny thing we will only use in certain situations. Using a quick cost-benefit analysis I figure out how much I will use that item and what each usage costs.

For Example

I paid $499 for my AirPods Max. I know I'll use them for recreational listening, Zoom meetings, and sometimes for my daily walk, for an average usage of once or twice daily for over an hour. Accounting for days I don't use them, that's ~$1.50 a day with ~547 hours of listening in the first year. If I own them for five years, that's 30 cents a day. I'd say that it's a worthy investment. I mostly focus on the first year cost as you're most likely to use something within the first year of owning it.

An example of a less justifiable purchase? I talked myself out of buying a Peloton because of this same cost-benefit analysis. The most basic bike is $1,495. Considering I like going for a mental health walk most days and I'm fairly active at work, I'd most likely use it 1-2 times during the work week and on weekends. So we're looking at ~4 uses at most a week. In the first year that's 208 uses for a total of $7 a ride or $14 a ride if I use it only on weekends. Not too bad. But once I account in the accessories and weeks where I might not feel like biking or my bad knee acts up, it's looking at closer to $30 a ride in the first year, which wasn't worth it to me. So as cool as I think Peloton is, I know it isn't for my lifestyle compared to someone who likes to bike every day.

Will I want an upgraded version soon?

Product launches are constantly happening. There's always a new phone or tablet or crazy contraption that we want. So why spend your money now when something better might be on the market later? This is a difficult question. When considering a product, ask yourself if it has all the bells and whistles you want. If it doesn't, should you hold off until the upgrade is on the market?

In July 2020 I purchased AirPods Pro (I really like wireless headphones, no judgment) after holding off on buying AirPods for years. What made me pull the trigger was that the noise cancelling feature. There wasn't any other feature that I was wanting, so I knew that if an upgraded version came out later I wouldn't be disappointed I didn't wait. In contrast, I still haven't bought an air fryer because I know once I get one I will find one I like better.

Is there a cheaper alternative?

The world is full of dupes. That's how a capitalistic society works. If I want something expensive, first I check if there's a good quality alternative on the market. I am absolutely obsessed with the Lululemon Align leggings, but I can't wear them to work and I can't afford to have a pair for every day of the week. I did my research and through trial and error found a more affordable brand that had the same buttery softness. While not exactly the same, I feel just as happy with the quality. And now I can use ~$70 I saved toward purchases that I can't find a great alternative for.

Is there a retailer who sells it cheaper?

On my journey to purchasing AirPods Max I did a ton of research. It's a big purchase and I want to spend the least amount possible. I compared Apple's prices to that of other retailers. Apple sold for $549, Best Buy for $499, and Amazon for $479. The exact same product for different price points. You'd be amazed how often this happens. Do your research so you aren't spending money you don't have to.

Can I use payments or points?

And on instances where I can't find a sale, there are other ways to get bang for your buck. Because I have a Best Buy credit card, certain purchases automatically allow for interest-free payments. If I'm spending $500 I would much rather pay it over 12 months. Other retailers you can use credit card points on, or reward points that can be applied to purchases. I paid for my hotel for my friend's wedding purely on rewards points. It's not about shopping more, it's about shopping smarter.