Jeremy Stein - Journal

« »

The One Time Purchase Myth

There are two types of purchases: “new” and “maintenance”. A new purchase is something that you don’t already have. A maintenance purchase is something that you’re replacing, fixing, or servicing. A new purchase is so much more significant than a maintenance purchase. A new purchase adds to your list of possessions. These are the possessions that you’re going to have to maintain (replace, fix, and service) for the rest of your life. These possessions represent your chosen lifestyle and they dictate your expenses.

I used to believe that I could make one-time purchases. I was told that I should just take $500 out of savings and buy a camcorder. I was missing precious moments of my childrens’ lives and I needed to capture them before it was too late. We didn’t have a “camcorder” budget, but this was just a one-time purchase that was so important. We took the money out of savings.

Now, I don’t regret this decision. I’m glad to have movies of my kids. However, I now realize that this was not a one-time purchase. Eventually this camera will break and I will want to replace it. I’ll need to keep up with the hardware and software requirements for my computer. I need to buy storage for all the movies I record. Over my lifetime, I’ll probably have to spend about $100/year to make “owning a low-end camcorder” part of my lifestyle.

It’s difficult to do, but I think it’s much better to think of expenses in terms of their average cost over your lifetime. A replacement vehicle seems so expensive at $10,000. But really, it’s just a hiccup in the lifetime average cost of about $500/month to own and maintain 2 cars. I’d like to buy a laptop computer, but I deceive myself if I think it will just cost $800. That $800 would represent the first payment in the continuing cost incurred by adding this possession to my standard of living. A $1,000 car repair bill should bother me much less than my inclination to buy the laptop. The former has already been accounted for in my lifestyle. The second is an addition, one which I need to consider whether I can afford long-term.

October 27, 2004 4 Comments.


  1. Tara replied:

    How depressing. Much easier not to think too much, yes?

    October 27th, 2004 at 2:25 pm. Permalink.

  2. Bob Aman replied:

    Yeah, I’m going with “How depressing” as well. I think it would be a fair assessment if I were to say I hate money.

    October 27th, 2004 at 6:42 pm. Permalink.

  3. Shannon replied:

    On the other hand, this makes me feel that the couch that we finally purchased 2 years into our marriage was worth it.
    Now, would a dining room set be worth it?

    October 29th, 2004 at 6:29 pm. Permalink.

  4. Shannon replied:

    You are a prophet! You said, “eventually this camera will break”….I just wanted to make sure you were not without honor on your own website!

    June 19th, 2005 at 1:52 pm. Permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *