Would You Rather Pay Now or Later?

by Andrea · 4 comments

in Frugality

taking money from wallet

A few weeks ago, a friend asked about my decision to buy my son’s jeans from Old Navy, despite the fact that he’s outgrowing his clothes at an alarming rate.

“Wouldn’t you rather buy cheaper jeans?” she asked. “That way it won’t hurt as much when you have to buy new ones in a month or two.”

I responded, “I could do that, but it wouldn’t make much sense. The Old Navy jeans are only about $7 more than a pair from Walmart. They survive many more washings, which means I can sell them on eBay when he outgrows them. In the end, it works out about the same, and sometimes I even make a little money.”

My friend seemed puzzled by my logic. “But if it’s the same either way, why not just spend less money upfront? Then you don’t even have to worry about selling the jeans to get back the extra money you spent!”

The Now or Later Debate

With most things in life, we can choose whether we pay more upfront, saving money later, or pay less upfront with the risk of owing money down the road. Whether we’re buying a home, choosing a college, or even picking out clothes for our kids, it’s important to weigh out the pros and cons of what we spend to make sure we make the best choices possible. Failure to do so can cost a lot of money in the long run!

Imagine that you’re shopping for a car. You can either pay $12,000 for a car with an extended warranty, or you can pay $10,000 for the same car with no warranty. Many people would see that $2,000 difference and think, That’s a significant savings! I should go for the better deal! But is it really a better deal?

If you buy the car with no warranty and it breaks down 6 months later, it could cost more than the $2,000 you initially saved to have it repaired. However, some people may argue that if the car doesn’t break down during the warranty period, you’ve wasted $2,000 that you could have saved instead. Neither of these viewpoints are right or wrong – it’s simply a matter of what works best for you and your financial situation.

My Case for Spending Now

When I have a choice, I will decide to spend now instead of later nearly every time. I would much rather pay a little more for something today, when I know I have the money, than gamble on having the money months or years from now. Sure, I have an emergency fund, but I don’t want to dip into it for something that shouldn’t be an emergency. Plus I never want to assume that my current financial situation is a promise that things will be that way in the future.

The benefits of spending now aren’t always financial. When I buy my son’s jeans, I’m paying $7 more per pair because those jeans last longer. That means I’m not driving to Walmart at 9 PM to purchase new jeans because my son ripped a hole in the knee or the zipper broke in the wash. Also, I have a smaller risk of encountering two or more emergencies at the same time – like the time I totaled my vehicle, broke the door on my washing machine, and found out I was being dropped to part-time status at work, all in one week. Spending now means I’m spending on my own terms, not the terms of whatever fate may befall me.

What About You?

Do you prefer to spend now or later? Have you ever been burned when you tried doing things the other way? In what situations might it make sense to save money upfront?


Andrea is a 29 year-old Licensed Clinical Social Worker and single mom who blogs about her journey out of debt at So Over Debt.

{ 3 comments… read them below or add one }

Careful Cents April 19, 2012 at 7:07 am

I’m definitely in the camp of spending a little more now, than later. I agree with your point about buying higher quality items (even if they cost a little more) that will last longer and have a better resell value. I do that a lot myself, with my clothes and shoes. It’s not always going to be better to buy the name brands, but some brand names are made with better quality in mind.

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Andrea April 19, 2012 at 7:12 am

I’m the same way – I’m definitely not obsessed with brands, but if a certain brand makes better clothing that keeps me out of the mall, that’s the one I’ll go with whenever possible. It depends on what it is, though. I don’t buy more expensive flip flops because they’re usually worn out after a year anyway, for instance.

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Claire T Richmond May 25, 2012 at 5:27 am

You have made some very interesting but relevant comparisons. I particularly like the jeans comparison. I always buy from Gap you pay a bit more but they last a long time, rather than buying an inferior pair at somwhere like Walmart.

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