Overspending on Big Purchases You Think You Can Afford? Don’t let one major purchase quietly mess up your journey to financial freedom.
Sanjib Saha
20 May 2025
Even if we’re pretty smart about money, almost everyone overspends now and then — only to realize later that what we got wasn’t really worth it. For some, it’s a $500 designer bag. For others, it’s a fancy meal at a top restaurant, or maybe a slick new car.
If you can afford it, no big deal — as long as it’s not happening all the time and you’re still keeping your long-term goals on track.
It’s also really hard to completely avoid lifestyle creep — that slow, sneaky rise in spending as we earn more over time. A newer car with better safety features? An extra vacation or two? Celebrating special occasions with nicer dinners? All fine — nobody’s saying you have to live like a monk to be financially smart. A little extra comfort is part of enjoying the journey.
But then there are those bigger purchases that seem “affordable” at first glance — until you dig deeper and realize they come with hidden long-term costs that really drag you down.
Examples?
>>> Buying a house that’s way bigger than you’ll ever really need
>>> Signing up for a “bargain” timeshare at a vacation spot
>>> Buying a boat or RV for “family memories” that mostly gathers dust
On the surface, these seem manageable. A bigger mortgage fits into your paycheck. The timeshare sounds like a steal. The boat? It’ll “pay for itself” by saving vacation costs (or so you tell yourself).
But a real, detailed look at the total cost of ownership usually tells a different story.
When you add up the ongoing costs — higher taxes, insurance, maintenance, repairs, storage fees, interest payments, and the lost opportunity to invest that money elsewhere — the hit to your long-term wealth can be much bigger than you first thought.
At that point, a cheaper or more flexible alternative might start looking really attractive.
Take the bigger house example, which comes with additional costs you might’ve missed:
>>> Higher property taxes, utilities, insurance
>>> Bigger mortgage interest payments
>>> More expensive repairs and maintenance
>>> Less money left over to invest and grow elsewhere
>>> Higher selling costs later (plus potential capital gains taxes)
Sure, the house is beautiful. But once you add it all up, it could end up costing you way more than you ever expected — and maybe even slow down your financial independence by years.
Same with a boat, RV, or vacation property. Renting when you need it might seem expensive, but it’s often way cheaper (and more flexible) over the long run compared to owning.
The takeaway?
Big purchases are fine if you first do a full, honest calculation of what they’ll truly cost you over time — not just the monthly loan payment or upfront price.
Look at all the hidden costs, lost investment growth, and flexibility you’ll give up.
If you still think it’s worth it after seeing the whole picture? Go for it.
If not? You just dodged a major financial setback.
Think long-term total cost of ownership. Protect your future. Spend smart.
This article is part of the Big Mistakes series