When most people want something, if the cash is available or their credit limit allows for it, they will buy it without putting very much thought into it. I was thinking these thoughts the first night after waking up in our brand new super king-sized bed. I loved the way our room looked (bar the wood-effect window blinds that I would love to change into shutters when it’s possible).
How long had I been wanting to get a new bed and to change the general look of our bedroom? Almost five years – yes, five years - but in the intervening period our money had had other priorities so I wouldn’t allow myself the indulgence of a nicer bed: first, money was needed for the business and then I thought other parts of the house were higher priority than our bedroom.
I had wanted a Rococo bed so much, for so long that, I kid you not, I visited their website at least 100 times over the five years before I eventually called and made a purchase over the phone. Most people won’t wait five years.
What finally pushed me to buy?
Well, many of my business needs had been satisfied and being 8.5 months pregnant meant a good night’s sleep was very hard to come by so making the room more comfortable took on a new priority.
To accommodate a new and bigger bed we also had to redesign the wardrobes in our room – I waited just over 4 years to allow myself that indulgence.
I make the decisions on décor and financial investments in the house as my husband hates any of that stuff with a passion. He even hates being asked to decide on one pair of anything versus another – in fact, he had no idea which bed we were getting until he saw it in the bedroom, “Surprise me!” was what he said when I asked whether he wanted to help choose a bed. I know how lucky I am to have this kind of unilateral say.
How much did this all cost? Not as much as I could have spent but still a hefty sum considering average pay:
Seriously, £6,000?? They offered 8-year financing with payments of £100 per month. Most people would have jumped at that but my background in finance meant I knew they would be using mortgage-like interest and 3 years in you would barely have chipped at that £6,000. So, even if you decided to pay it all off 5 years early you would be lumbered with a total of at least £10,000 including cancellation and admin charges. BAD DEAL.
I’m going into this story in a fair bit of detail because I know many other women handle their family’s finances or at least have a say in them and could be going through the same needs.
Personally, I never buy domestic goods on finance, you can never get a good deal. I pay cash and we save until we have that cash available.
I am a very impatient person in general but when it comes to waiting to spend I have the patience of a Japanese man.
As I looked at our pretty bedroom and thought these thoughts I recalled another time when I wanted something for ages: It took me five years of wanting a Mercedes before I finally decided it was time to get one. That time I was pushed by a recent diagnosis that my sister had Lupus. I was heartbroken.
It was late 2010 and I had been saving for a year based on my plan to quit the 9-to-5 day job in early 2012 to start a business.
The diagnosis just made me want to live a little so one afternoon, whilst my then-boyfriend, now husband, was sleeping – he was working night shifts – I went to the closest Mercedes dealership and committed to a £24,000 ($40,000) brand spanking new red Mercedes.
I remember the day like it was yesterday. As they only had the Merc I wanted in white I told them I would wait until they could deliver me one in red – and I would collect in a month because I was off to China. I personally consider cars consumer goods, wasting chattels, so I pay cash for cars too. No cash – no car. I went home and when Harry woke up I was like, “Guess What?”…. “We’re getting a new car.”
I also have this weird thing where I like brand new cars – a bad investment in the eyes of many Economists but my dad poisoned my head with his theories on second hand goodies – he thinks you always buy other people’s problems. However, once you get the brand new car I believe you should hold it for 7 to 10 years before upgrading. I don’t chop and change cars every 2 to 4 years like many do.
The Merc is the first ever car I purchased brand new and I have never had a problem. The first car I ever bought was second-hand and although it had only 5,000 miles on the gauge it gave me endless problems. I sold this before I started dating The Good Husband.
THE MORAL OF THE STORY
In the above, I have told you about two major investments that I waited to make but I tend to wait for the right time to purchase even small items. I make bad financial decisions here and there, I’m not perfect, but from the moment I graduated I realised more and more that most people are extremely impatient when they want something and this slows down their wealth building journey.
Society drives us to make impulse decision with sleek ads. If you added up all the money you spend that you didn’t have to, you would shock yourself; I would shock myself. Unfortunately, however, making financial progress requires you to analyse every single penny you spend like it’s your last.
You might even need to rewire your thinking and reframe your mind re. what is good value for money. For instance, what is good value for a coat?
One of my friends spends £500 on a coat and buys new ones frequently.
My first coat bought in 2002 cost £50. I had been earning a 6-figure salary (in USD) for over five years when I upgraded to a £200 Reiss coat in October 2010. As always I bought it when it was on offer, 50% off – woohoo. Almost 5 years later I am still using the same winter coat and I think it’s good for at least another 3 years.
What is good value for money to one person is not good value to another. We all have different anchors in our heads about what things are worth. If you are not where you want to be financially you need to have a good think about your views on money. Ask yourself the following:
I hope you enjoyed my insights on prioritizing your finances and making sacrifices to get to your financial goals faster. I know five years sounds like a long time to wait but in each case I didn’t put a deadline of five years, it just happened – whenever I fantasized about the Merc or the bedroom I knew deep down the timing wasn’t right; something else was higher priority.
Creating realistic priorities for your finances will see you grow.
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Heather on Wealth
I enjoy helping people think through their personal finances and blog about that here. Join my personal finance community at The Money Spot™.