Many people are raised with a buy now and pay later attitude. This type of thinking leads to debilitating debt and potential destitution. It can be fun while it lasts, but eventually this approach will hit a wall for nearly everyone. By adjusting your thinking habits when it comes to saving and spending, a wide swing can be made from potential poverty to an extremely comfortable lifestyle with a well-padded bank account.
Learn to buy needs and not wants.
Only children really confuse needs and wants. Adults tend to consciously shift wanted items that are unneeded into the need column. By evaluating what items are truly needed versus those that ride high on your want list, you can trim a bundle of unnecessary spending from your budget. It is not always wrong to buy some wants, but designate some of your discretionary spending toward these items after appropriate amounts have been saved.
Condition yourself to pay with cash and not credit.
Stop carrying your credit cards with you if you lack the control to leave them in your wallet. If you must buy on credit, make sure that it is the only way available to procure a desperate need. Always question whether what you are willing to buy on credit will outlast the time it takes to pay it off. If you are planning to eat it, do not buy it on credit. Buying recreation on credit is not a great plan either.
Choose to earn interest instead of paying interest.
Even earning low interest is better than paying interest at any level. When you buy on credit, be sure to compute the cost of the item after it is paid off. A new car, for example, may have a sticker of $20,0000, but it will cost you many thousands more than that it you finance it for several years. Think of interest as a thief that is robbing from your future earnings.
A good used item can function as well as a new one.
Some people hear the word used and think it is old and worn out. The reality is that many used items are easily as usable as a new one. Tools, clothes, household appliances, cars, and a long list of other items can be purchased much cheaper on the used market and will give great service. Try to buy used first.
Think about how hard it is to make money.
If you work for a living, realize that each few cents that you spend have cost you minutes of your life to earn. Price every thing by how much of your life it will require to get it. By taking a good long look at items this way, you will soon see hours of your life going into the trash as new things lose their initial luster.
Envision what you can have if you choose to eat at home.
A hamburger cooked at home costs you between 1/4 and 1/2 of what it costs you to eat it at a restaurant. It will often taste better and be dressed exactly as you like it. Even adding on the cost of fuel and cleaning supplies, you will still save a lot of money. If you cook wisely at home, you may be able to get more than one meal from what you have prepared. Not only does the initial meal cost less, any subsequent meal that it provides is free. Some people will argue that your time is worth something. You will sit in many restaurants waiting on food as long as it takes you to prepare one at home and that does not include travel time and cost.
Think long-term on purchases.
What will this purchase look like in 6 months or 2 years? Video games, cheap furniture, and other items are great at the beginning, but soon are either yesterday’s fun or look worn out. Try to make purchases that are investments that will last beyond a day or two. Some things may cost more at first but be less expensive in the long run. You may be required to save for a while to afford them.
Plan all purchases not just the big ones.
Do not allow yourself to buy anything that is not in the plan. Retailers are skilled at pricing goods in a range that people will spend without thinking about it. Anything that costs less than $10 is considered prey for an impulse purchase. You have to think about your spending plan. If you did not plan to buy the item now, leave it on the rack or shelf. Build into a future shopping trip when it is part of your planned spending.