Purchasing Goods and Services

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The main consideration when making a purchase shouldn't be whether there is room in the budget, but whether

  • the item is needed
  • another item can be substituted
  • a suitable item could be constructed instead of purchased
  • the item could be borrowed or rented if not needed often
  • the future cost/opportunity cost is worth it
  • the item is of such quality that it will maintain its value well and can be resold when no longer needed

Services should be evaluated the same way. The first consideration should be whether the service is needed or warranted. Many recurring monthly bills are for services that are not necessary (i.e. cable, cell phone, gym membership). The goal should be to lower the number of recurring bills and only pay for services or items when you need them. This includes options like a pay-as-you-go phones or gym time.