I just bought a HDTV last night – I figure that I won’t ever see a Buffalo Sabres hockey team as good as the one we have right now. Is it a smart money move? No way, but I can rationalize away just about anything if I try

Do you need it? Not really, but you’d like to have it, otherwise you wouldn’t be saving.

You’ve got your plan – some people prefer that it’s best to have it all right now, and that may be fine for them, but some people prefer to have it at the right time, which is what you’re doing.

Some people just don’t want to wait to “feel good” about their purchase.

JLP — it’s like Dave Ramsey always says — “We’re going to live like no one else so that tomorrow we can live LIKE NO ONE ELSE.” The meaning I see in this is that if you defer this purchase until you can pay cash, you’re only increasing your financial stability both now and later. Now, because if you really needed to use that money for an emergency you’d have it. Later, because when you enjoy your new kitchen the food will taste SO MUCH BETTER because it’s already paid for.

I’d love for you to have a new kitchen, but I also think that whether you have a new kitchen or not is incidental. What is really important are the people in your life and how rich a quality of life, not whether you have granite countertops. You are living a truly free way when you opt to let your granite countertops wait — you are also doing something that this society has decided is worthless, deferring pleasure until you can truly afford it! I am not surprised at some of the responses you’ve gotten. However, you know as well as I do that you do not really find quality of life in your countertops, range etc. — they are just icing on an already satisfying cake.

JLP, don’t sweat it and don’t worry about waiting until the finances are right. There is so much more to life than a pretty kitchen.

db
http://www.debtblitzkrieg.com

In the case of our kitchen, we built it almost exactly as we dreamed of it within practical constraints – it should last many years (hopefully decades), it greatly enhances the value of the home, and it makes the home far more functional. So, this was a why wait, why skimp kind of question.

Now, obviously it’s impossible to put hard and solid numbers on such things as how perfect a potential mate is. But it’s actually easier to do with these financial decisions. Economists do it all the time…. they attempt to quantize happiness. On a scale of 0 to 100, how happy would you be if…? Would you prefer A to B? If so, then A provides more happiness than B, so try to take a bunch of options and order them according to your preferences, and that’ll help us construct a model of your happiness within this particular domain.

Situation A: $50k renovation, now, $30k financed
Situation B: $20k renovation, now, $0 financed
Situation C: $50k renovation, 3 years from now, $0 financed
Situation D: etc. etc.

In my own opinion, for such a big expense, it is worth it to finance as long as you have a plan for paying it off within a couple of years. You have to consider the value of having something NOW vs. 3 years from now. For all of the following discussion, I’m still assuming a $50k renovation 3 years from now (but, realistically, by that time it could actually cost $55k or more).

Let’s look at Situations A and C, for example. If you go with A, you’ll have $30k financed, let’s say you pay it off in 3 years at 10% interest. The payments will be $968 for 36 months. You will end up paying about $5,000 in interest.

So that $5k is the most simplistic cost difference between A and C. Under C, you still will have to “make payments” of $718 a month to your kitchen fund for 3 years (assuming you earn 10% interest on savings). So that’s $250 a month difference in payments. $250 * 36 = $9k extra that you’ll pay (the difference between the 10% interest that you pay vs. the 10% interest that you earn). Keep in mind that I’m still assuming $50k in renovations 3 years from now, but prices will presumably rise, so this isn’t entirely realistic. Inflation would reduce the difference between the two scenarios (inflation always favors the borrower).

So, let’s look at that (worst-case scenario) $9,000 extra that you would pay under Plan A. That is $9,000 for 3 years’ use of your kitchen, or $3k per year. How long were you planning on using it before you die, move to a new house, or remodel the kitchen again? Taking this $3k a year as a standard cost per year of enjoyment, you would need to enjoy the kitchen for exactly 16.7 years (50 divided by 3) to get that same average amount of enjoyment out of it. If you will enjoy the kitchen more than 16.7 years, it might make more sense to wait until you can pay cash for it. If not, your average cost per year of enjoyment will rise beyond $3k, so it makes sense to borrow the money now.

This is just a simplistic view of it, but I think it is already pretty illuminating. You may want to plug in your own numbers and look at it more thoroughly. I know you weren’t looking at 3 years, and also I’m not entirely sure what’s an accurate figure for the cost estimate.

Why? Because to me a good kitchen is worth the investment. We use ours daily, we eat in a lot because we like our kitchen. It’s not the perfect kitchen, but now we get a lot more use out of it when before it was too small to fit everything.

I weigh the cost of a purchase or how often I’ll use it. For example I want a new car, but I don’t need a new car.

I have water damage also in my kitchen, and it’s absolutely necessary to repair because to me proper maintenance of a home is essential to keeping it’s value. I do not try to cut corners and save money by being penny wise and pound foolish.

I maintain my cars religiously because I want it to last. Sure an extra $50 from skipping an oil change would be great, but is it worth the damage to the car? No. So I just try to keep going.

I also believe in buying better quality things that last longer instead of lots of cheap trinkets. So if I were doing a kitchen, I’d go for something that will last a long time, look good a long time, and makes me happy. Resale doesn’t matter because I will use a kitchen everyday, and it will bring me pleasure.

Waiting is fine, it’s just a personal decision and only you know what it looks and functions like.