What should I consider when deciding to save gold for expensive items vs buying smaller items right now?

When I return to base, sometimes I have 500-700 gold when the item I want is 1300+. What factors should I consider when deciding to either buy a less expensive item or save my gold to buy the item I want?

Buying Smaller Items:

Buying a smaller item will give you a small power boost right away. If you are laning against an aggressive player/champion, or if you are drawing a lot of jungle attention, that small power boost could be the difference between getting killed and securing a kill for yourself.

Buying Bigger Items:

The thing to remember when saving up for more expensive items is that you are not getting any more powerful than you were when you recalled. Let's say you and your opponent both recall right after a trade, where your opponent won the trade. If you recall just to heal, and don't buy any items, but he does buy one of the smaller items, he will be more powerful than you when you both get back to lane. The next time you do a trade, the extra power might be enough for him to kill you, instead of just force you to recall to heal. On the other hand, if you can stay safe and farm until you have enough gold for your big item, you will be more powerful than he is when you return to lane, where he might still only have the smaller item he bought after the last trade.

TL;DR

If you are fighting enemy champions a lot, you generally want to take any small incremental increases in power you can, which means buying smaller items. If you can safely farm without threat of dying, go for expensive items, as they are usually more gold efficient and you will get to bigger power spikes faster.