Here's my two-step rule for how much I spend on things:
- If I care about it, I buy the second most expensive tier out there. For me, that includes things like cars (BMW and Porsche and Lexus, but not Ferrari or Bentley), wristwatches (Omega, but not Rolex), and home gadgets, home theater, computers, etc.
- If I don't care so much, I buy the second least expensive. For me, this includes sunscreen, power tools, clothes, wine, home appliances, and furniture.
It's worth noting that I believe you get what you pay for. I'm not a deal-junkie, I'm pretty pragmatic about value-for-money of standard mass-market goods and services. This two-step rule doesn't work as well if you're the kind of buyer who prefers auction sites, yard-sales, or “knows a guy” who needs to move a TV real quick.