The first thing to throwout is purchases you have made in the past. Now, this doesn’t mean that you should throw out your debt picture or how much you have coming in versus how much you are spending. No, the key here is that you should be doing whatever you can to make sure that you are spending within your limits but you cannot look at past purchases to determine whether or not you should buy something in the future.
This is a principle called the sunk cost. Money spent is money spent. If you went out to dinner and now you are going out for lunch you shouldn’t make that determination on lunch based on dinner. Either you should or you should not go out for lunch. This might sound a little complicated but it is anything but.
Remember to avoid thinking of a big purchase as an investment unless you have the potential to see it rise in value. the truth of the matter is that nothing that is going to decrease in value is going to be considered an investment. However, that doesn’t mean a big purchase can’t have optimum value. Buying a big purchase is never an easy thing to allow yourself to do but you should be willing to take the plunge if it’s worth it and you have made the decision with sound judgement.