Knowing When to Upgrade

A few weeks ago when we brought up the idea of household debt panels, we talked about the way that many people attempt to upgrade their appearance with expensive cars, clothes and other items even when they can’t afford to because their possessions act as a mask to their true financial identity.

Old car

Believe it or not, there are actually some people who don’t use their possessions as a mask. Some people actually can afford to spend money on expensive items and upgrade in certain areas of their life without relying on credit cards and loans to do so. But even those who can afford to upgrade face some serious financial decisions before they do because that money might be better spent added to the savings and retirement accounts or paying off student loans and mortgages. And even if they have the money right now, that doesn’t mean that they might not lose their job in a few months or face some other sort of financial catastrophe that eats away at their savings quicker than they could have anticipated. And if that happens, they will likely regret their upgraded purchases.

So if you are thinking about upgrading your car, electronics, furniture and wardrobe but aren’t sure whether or not you should, here are a few points to consider to help you make the right choice.

1. New cars: If you are driving a gas-guzzling car or one that is in such a state of disrepair that you are sinking thousands of dollars into fixing it, then it may actually be a good idea to upgrade. Just make sure your overall savings will be greater with the new car than they would be if you simply put up with the old one. Be sure to factor in the insurance costs for the new car as well.

2. Electronics: I know those amazing sales on televisions and MP3 players are unbeatable, but if you have working televisions and music players in your home, then you don’t really need to upgrade. If you really must have the latest new 3D TV or iPad, at least set limits on which one you will buy, instead of just indulging in both.

3. New furniture: There is nothing worse than a saggy, uncomfortable sofa. When your furniture has springs poking through cushions, is no longer functional or has stains and rips that cannot be repaired, then buying new furniture makes sense. If you just don’t like the style or color of your perfectly good and functional furniture, you might consider investing just a little bit of cash in some furniture covers and minor home redecoration instead.

4. Wardrobe: Who doesn’t want to know what they look like in a $5,000 suit or $500 pair of sunglasses? But that natural curiosity doesn’t mean you need to upgrade your wardrobe to that extent. If your clothes fit and are in good condition and are appropriate for the kind of work you do then there is really no reason to upgrade. Uber-expensive purses, shoes and suits do not make the man or woman—they make the profit margins of the retail establishments.

Photo credit: greenkozi

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Author Info

This post was written by Yolander Prinzel. Yolander is a financial writer as well as a series 7, 66 and 2-15 licensed representative. During her decade of financial industry experience she has been an insurance agency director of marketing and director of operations, a life insurance underwriter, and a trading service specialist for Raymond James Financial Services. She was a featured speaker at the 2006 Hartford National Sales Conference and the 2006 Brookstreet Securities Annual Conference. Check out her portfolio at

4 Responses to “Knowing When to Upgrade”

  1. James |  Apr 08, 2010 at 3:44 pm

    Most of the time an upgrade is not necessary in my mind, but if you do splurge i recommend only doing it when you actually have the cash in reserve to cover your new fancy purchase.

    you have to admit it sure feels good when you buy that awesome item that has been on your wish list for weeks, months, or years

  2. wholesale shoes |  Apr 15, 2010 at 8:18 pm

    Thanks for your suggestion.
    I think apparence is not the mark of their true financial identity ,but somewhat we should pay attention on our apparence.