Real-life money situation
“I want to buy an expensive phone.”
I want to buy an expensive phone. A phone is used every day, which makes it a reasonable place to spend — and an easy place to overspend.
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A phone is used every day, which makes it a reasonable place to spend — and an easy place to overspend.
What to think about
- What you actually use a phone for, and which features serve that.
- The total cost if you pay in installments, not just the monthly amount.
- How long you expect to keep it, and its cost per month of use.
- Whether the want is still there if you wait two weeks.
Common first moves
- Compare the total repaid on installments with the price paid outright.
- Work out cost per month over the years you will keep it.
- If it is still wanted after a waiting period, save up for it first.
Watch out for
- Low monthly payments hiding a high total.
- Upgrading because others have, not because yours stopped doing its job.
Lessons behind this
- The true cost: cost per use and total cost of ownership — The price tag is only the beginning. What something costs across its whole life is the real number. (7 min · Practical)
- Buy now or buy later? — Waiting changes both the price you pay and whether you still want the thing at all. (5 min · Foundation)
- Social spending and status consumption — Spending to belong and spending to be seen — both human, both easy to overdo. (6 min · Practical)
- Interest: simple, compound and APR — Interest is the price of borrowing. How it is calculated decides how fast a debt grows. (8 min · Foundation)