Resisting The Urge To Buy

Saying no to yourself can be hard. We’ve all been there - here’s this new thing we have in our mind. It’s shiny, new, and it’s absolutely awesome. It has all the latest bells and whistles. It’s high definition and it grills better burgers. It has better gas mileage and better upholstery. And it’s on sale! Whatever that is - I want it. Good god, I want it now, and I deserve it!

But I also know I can’t go around buying stuff. Between paying for everyday expenses such as mortgage, groceries, gas and bills, saving for larger purchases, and investing for the future, money tends to run out fairly quickly. If I acted on every single urge that comes in, I’d be out of money (unless I bought a money tree, but I haven’t seen one for sale).

Why is it so hard for me sometimes?

What makes things especially hard for me is that I get excited about new things very easily. My mind quickly jumps into rationalization mode and shows me 17 ways this new thing will make life awesome for me. If it’s a new barbecue, I can almost smell the freshly grilled meat and hear the noise of a party in the background. If it’s a car, the brain paints me the picture of long road trips in a shiny new car. If it’s a gadget - all the ways this new gadget will make me more productive.

People (and myself especially) are masters of rationalization. We can turn a “want” into “need” with a lightning speed. My mind almost whispers into my ear how I deserve this new thing - and why I should have it. ” - Come on, you’ve been working hard. It’s time to treat yourself a bit. You deserve it!”.

Grills quickly become investments into relaxation that we so badly need. New SUV - investment into safety (even though SUVs tend to be less safe to begin with). New iPhone - an investment into productivity (although the other iPhone was just as fine when it comes to Angry Birds).

My “magic” system to resisting the urge to buy!

Over the years, I’ve figured out the ways to drastically cut down on impulse buying - especially when it comes to larger purchases.

- Step 1: Think back to all the things I wanted to buy … and didn’t.

By now, I have a list of things I really wanted to buy but didn’t. Some of them look silly by now, some are quite reasonable but timing was wrong. Every time I get the urge to buy something, I look back to my experience, and think “Will it be like this time I wanted to buy … and didn’t? Will it look silly after a while as well?”

Chevrolet Camaro IROC-Z

Resisting The Urge to Buy

For some reason, I really wanted to buy this car when I was much younger. I even looked at few for sale, but after a while my interest in it fizzled away. And thank goodness - the thing is butt ugly.

Honda Silverwing motorcycle

Resisting The Urge to Buy

Just like anybody else, I went through “I want to ride a motorcycle” phase. I even saved up some money, and started looking around for used ones to buy. After a while, I found a decent Honda for sale, and met with the owner. The bike was in great shape, but I can’t say the same thing about the owner - he was using crutches. Apparently, he had a small accident on a motorcycle just few weeks ago that left him with broken legs, and that was the main reason for selling it. Let’s just say I lost interest in riding bikes on the spot.

Compaq iPaq handheld computer

Resisting The Urge to Buy

This was a hard one. The technology nerd in me was going overdrive screaming I really really need this. All the features appealed to me. I imagined myself being super productive with it, scheduling events, and sending emails. After waiting for few weeks, I’ve discovered the fact I can send emails just as easily from my computer, and scheduling works just as fine with a small notebook if needed. I wonder if these things are still around? Looks rather archaic by now.

- Step 2: Save money in cash

I made a promise to myself to never ever buy anything on credit. Every single purchase I make is only done with cash - and cash is saved up no matter how long it takes. Sometimes it’s just couple of months, sometimes it takes much longer - but I always save money in cash. Credit sure makes purchases easier - these days you can even buy pets on credit - but credit also makes it easier to follow through on foolish decisions.

- Step 3: Think how this purchase fits into my plan

Ultimately, you always want to be somewhat utilitarian. Ask yourself - what benefit will you get from this new purchase? How will it benefit your life as a whole? If you have goals you’re working on - how this new purchase helps you achieve them? Some purchases truly benefit you and your family - a second car will allow your partner to bring in a second income or make your life easier. A new flat screen TV (slightly bigger than your other flat screen TV) on the other hand doesn’t carry any benefits because the other TV is just as good - just smaller. Is high definition really worth the money?

- Step 4: Revisit the idea once money is saved up

Once I have the money in hand, and I’m staring at the item I want, I revisit the idea of buying it one more time. Do I still want it? Does it still appeal to me? I’ve worked really hard to save up the money and can almost see the sweat dripping from it - do I really want this new thing?

Countless times, I’ve walked away from the deal at this point of buying. For various reasons, I just didn’t want to go through the process after all the time and effort I put into saving the money.

Short version - just be patient.

Whatever your system to resisting the urge to buy, it all comes down to patience. Each of us has a couple personalities inside of us - rational frugal personality and “Oh good god, I want it now!” personality. One wants to follow the plan, stick to a budget, and save money. The other one is looking for party and good times. The party personality wants to buy the world, the frugal personality wants to save money and do boring things with them (such as investments, saving for the future, etc.). The best way to fight the urge to buy is to insert time between the urge and actual buying - chances are by that time my party personality moves on to wanting something else. Saving money in cash allows the time to pass and some common sense to kick in.

Hope this helps you with resisting the urge to buy!

Who do you actually think of when you hear the word “rich”? Evening gowns, traveling, yachts? Are these the only words that come to your mind? Well, that’s true to such an extent but not all rich people lead their lifestyles in such a way. “Rich” should be defined as a state having excess of money and there is a huge difference between ‘rich’ and ‘lavish’. Those who are self-made rich, are the different breed of people as they live differently and think differently. The financially wealthy are the ones who follow certain habits which should be incorporated by all those who wish to be rich but aren’t being able to get back on track. Although you might be able to find different financial blogs that will teach you ways in which you can become rich but do you think that only reading those financial tips will help you become rich? Certainly not! You require incorporating them in your day to day lifestyle. Here are some habits that the rich follow and those that the “wannabe-rich” should follow.

Good financial habits

Build wealth by saving cash:

Yes, this might be hard to believe, but the rich people do save money. Rather than eating out, they keep tucking in their dollars into different financial assets that pay them in the near future. As per an opinion by Jean Chatzky, 60% of the self-made rich are there due to their high savings rate. Write down all those areas where you spend money where you don’t need to spend. Be honest and get serious to find out all those cheap alternatives. If you’re someone who loves to shop Starbucks every morning, stop there and change this habit. When you’ve built your fund, invest them in the financial assets and watch it grow with time.

Don’t pay your dollars for things that you don’t need:

You might see your neighbor spend a lavish lifestyle but don’t try to outdo them. Rather stay within your budget when it comes to spending for all those things like your car and house. Are you presently paying $400 for your SUV and do you think that it is simply drinking down your dollars? If answered yes, pare down and cut down your dollar expenses. Determine whether or not you really need an SUV? Could you move on with a mini-van? Would that be a cost-effective alternative? Take a close look at all those lavish upgrades that you have done to your home and then check where you need to cut back. While doing the assessment, if you’re not honest, then you’re simply wasting your time.

Set financial goals and try to achieve them:

Taking steps will be a lot more productive when you know what your financial goals are. The rich are always sure about what they earn and they’re always ready with their plan before they go out to take any step. They always research on the ways in which they can earn the money that they want and they keep setting goals around it. Set financial goals that you can easily achieve as the moment you obtain them, this will boost your confidence. Once you reach your goals, set new ones so that you can always look forward to a new horizon.

Believe in “simple living high thinking”:

Yes, you might not believe this but the truth is that the self-made rich are the ones who lead simple lives than most other people. They don’t have 100 pairs of shoes and they don’t strive to possess them as they know that they won’t require them. So, you should take a close look at your house and get rid of all those things that you don’t need. Think twice before spending your dollars and always go for the simple.

Therefore, only reading the personal finance tips to become rich and build wealth won’t help unless you incorporate them in your daily life. Follow the above mentioned tips and keep debts at bay. Although there’s enough of debt help options in the market, you should try to be safe than sorry.

Guest Posted by Trenton

/p

What if I won’t be living long enough to retire?

On one of the forums I check out from time to time, somebody asked a question:

” - My brother-in-law puts very little thought into retirement savings. He has a tiny amount being funneled to a 401k and a small emergency fund. He isn’t a spendthrift, but isn’t interested in making a bigger effort. When I brought up my own plans, he told me he isn’t going to live long enough to retire.”

Is there a point to saving money then?

Well, here’s my personal opinion.

To me, saving money, improving your financial situation, and slowly building up your estate (portfolio, assets, whatever you want to call it) is not about living long enough to retire. The whole retirement thing as presented most of the time isn’t appealing to me at all - working hard all your life, saving up money, just to play golf all day and go on cruises once in a while? That’s just depressing if you ask me.

Living Long Enough to Retire

To me, having money is not about retirement. Heck, I don’t think I will ever retire. I think I will always work on something - if it’s not me working with my two hands, it might be an online business. If it’s not working on my own gig, it might be helping somebody with their company. Bottom line, the way retirement is portrayed most of the time is not something I am looking forward to, and it’s not why we’re working so hard on improving our finances.

What if I won’t be living long enough to retire?

Will everything I will do to that point be pointless? Of course not. If I do die early, my family won’t have to worry about money. My kids’ education will be taken care of so they can obtain their degrees. My wife won’t be forced to re-marry just because she can’t make it on her own - she will have enough money to make wise choices, not forced choice.

Having money will allow us take care of our parents and relatives - so we can always help them and not just find them a cheap retirement home where they won’t be treated right.

Having money is about freedom to do whatever you want to do - without worrying about your bi-weekly paycheck. There are things, I’m sure, you’ve always wanted to do but couldn’t because it would mean an end to your income. For example, I always wanted to cross Canada on a motorcycle. What if you didn’t have to worry about working 50 hours/week and bringing that paycheck? What if you could focus on your own personal interests for a while - money can make it possible.

Living Long Enough to Retire

Money is about helping others and sharing your wealth - and if you have plenty of money you can share it with a lot of people, and help a lot of people. You don’t have to retire to do that, and you can enjoy doing it way before that gray “near retirement” age.

And lastly, money is about being independent from circumstances. All of a sudden, you don’t have to worry about your car transmission. If it goes out, you just go ahead and fix it - or buy a new car altogether. You don’t have to put up with bad treatment at work - cause you can’t quit anytime, and take your time finding a better place to work for yourself.

None of these things have anything to do with living long enough to retire. And it’s not about being able to buy luxury cars or other “toys”. All of them mean comfort to your family, being able to take care of them, and just enjoying your life in general. Even if you don’t live long enough to retire in a traditional sense, money can greatly benefit your life. And that’s why I focus on working hard, managing money wisely, and investing for the future.

Have you ever asked yourself what money means to you?