Splurge or Save??

Nine West Gordon, Boutique 9

Stunning, T-Strap sling back pump on hidden platform sole with leather bottom. 4 1/2″ heel

As of yet, this is the first very expensive shoe that I am even contemplating on buying.

Influences

Ok, so the purpose of these posts is to be completely honest as to what is compelling you to purchase the item. Therefore, I have to admit, that when I first saw these shoes and fell in love it was fresh off the Sex and the City premiere. What also did not help was that a review posted on Zappos was from a woman who wore these shoes to the premier and got tons of attention. I love attention. Especially if it’s on my clothing.

Why this item?

At first glance, I thought the shoe to be unique, eye popping and very fashionable. I love the t-strap and the old flapper feeling the shoe exudes. In addition, I do not have any purple shoes and I’ve become much more welcoming to this color. Did I mention it was unique? And I love have different items, clothes and accessories that others do not.

And you need this because…

I can be honest: I do not need these shoes. This is purely an extreme want.

What are my Options?

Charging the cost of these shoes is not an option so I will essentially be paying with cash. Now, instead of buying these shoes I could:

(1) Transfer the money to my TD Ameritrade Investment Account. There I could buy about twelve shares of a speculative stock, stocks that are priced relatively low and are of high risk, I have been eying. Due to the nature of the stock, it could really pay off in the future. If the stock reaches its estimated target price I would gain about $6.00 in profit per share. SO, I could turn 140 bucks into $212. That’s a 51% return, found by taking the difference between the original and future price and dividing it by the original price. But the stock has is classified correctly for a reason, it’s all speculative.

(2) Add to my Emergency Fund. Your emergency fund is something that should consists of at least three months of living expenses. I have my fund in an online savings account with Amtrust Bank. Unfortunately I have been tapping into my reserve depleting it down to $600. Adding $140 would help boost my fund and increase my interest payments from the bank once again making money off of the starting $140.

(3) Pay down credit cards. Because I am sitting on about $2K in credit card debt, paying off $140 isn’t the most enticing or pressing issue. However, its a step in the right direction nonetheless. I am not being charged finance costs, because I am still on a promotional offer, so I wouldn’t be saving anything there.

(4) Add to my Roth IRA. I have an individual retirement account (IRA) with Vanguard. Currently it has about $1,900. I have been adding to it monthly since Summer 2005. This money would round it off to a nice $2,000. If I’m not going to sped it today, why not save it for tomorrow?

Splurge or Save?

Save. I’ve decided NOT to purchase the shoes. There will be others. Better ones. Things I have to tell myself to help the healing process. Also, I need an accounting and statistics textbook that just so happen to total up to the same amount of the shoes. It was fate.

Being a financially fit woman or attaining financial fabulousity is all about checks and balances. When faced with an item that you feel ‘speaks to you’ it is often quite difficult to make a rational decision. Taking the time to compare what else that money could be spent on also gives you the opportunity to get back on track with your financial goals and removes buyers remorse.

Do you have an item that you’re considering splurging on? Email me at somoney@missnewmoney.com with all of the details. Don’t forget to include a picture!

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3 Responses

  1. […] part she pays cash (or uses her debit card) for small purchases. However, Diann does not have an emergency fund or anything else to hold her over in the unfortunate event that something happens to her current […]

  2. […] finance advocates, including my fav Suze Orman, will tell you to pay down debt and build up an emergency cash reserve first, before you even consider investing in the stock market. As a young, budding finanshionista I […]

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