A third alternative is to completely forgo a purchase. Set a goal to live strictly within your means. Then look to avoid purchases a little more often.
Some of my best non-purchases ever:
- A time-share when we were broke (it was 50% off retail)
- A second car during college
- Commercial Real Estate during a boom
- A financed, immediate one-year supply of food
- A financed $30,000 new vehicle
A $1,500 couch for $200 is a good deal, but not a great deal. A great deal is not to buy a couch--especially if your old one works just fine. No matter how much you "save" in comparison shopping, you always "save" more when you don't spend any money.
The distinction isn't always clear, but it becomes less foggy by practicing discipline and realizing that money is accumulated by saying no.
(Photo courtesy Luigi diamanti)