1) Something I need. Clothes, house, food. I try not to skimp on those things, I buy decent clothes, eat good food, live in a nice house. I always know that if times are tough, I can scale these back easily, but these things always get paid for first.
2) Something I want, but only if it performs its principle function correctly, operates reliably, and is cost effective. I'll buy a Honda over any Mercedes for example. (I could cars in this category even though I need one for transport because I could always go el cheapo used car for my actual needs).
3) If I have time or opportunity, luxury items, but only one or two per year -- they don't have to conform too tightly to the cost effective idea but I have to make sure I can use it. If I buy it and have no time to mess with it, then it's a waste. These usually take the form of travel once or twice a year.
2) Something I want, but only if it performs its principle function correctly, operates reliably, and is cost effective. I'll buy a Honda over any Mercedes for example. (I could cars in this category even though I need one for transport because I could always go el cheapo used car for my actual needs).
3) If I have time or opportunity, luxury items, but only one or two per year -- they don't have to conform too tightly to the cost effective idea but I have to make sure I can use it. If I buy it and have no time to mess with it, then it's a waste. These usually take the form of travel once or twice a year.