Experts debate back and forth the main reason why the majority of individuals can’t save money and still somehow manage to rack up thousands and thousands of dollars in borrowed money, specifically credit card debt to the tune of $16,000 on average per household.
And plenty of shortcomings come to the forefront, such as the lack of a budget or trying to convince yourself that you don’t make enough money as the reason you’re not able to save.
The last point is one that has quite the ripple affect when you consider that income shouldn’t dictate a lack of savings if you, of course, budget properly and don’t do one thing that continues to plague those who are trying to set aside an emergency fund.
Spending money on things you don’t need.
The “want” versus “need” debate is one that runs roughshod over most people since the black and white discussion that it should be is mired in shades of gray. Not knowing the difference or, for that matter, not paying attention to those same difference is why we simply can’t save money. Buying what we don’t need and doing so in droves is sabotaging our savings accounts, or lack thereof.
Your best option to avoid impulse buying of products or services is to truly think long and hard about what you’re actually buying and determine if you really need it. And while you argue that you already do that, you might want to revisit that subject.
The 24 hour rule is the most proven method: you consider the purchase, and decide at the moment not to buy then determine after that time span if you still want or need it after you’ve given yourself time to think it over. Most of the time, you end up not going back to claim what would eventually be described as something you truly don’t need.
Questioning the purchase is paramount.
And of course having a budget is key, but have you ever considered writing down how much you spend. One of the drawbacks of the convenience that are credit cards is that they don’t really allow you to see at the moment what you’re spending. Sure, the receipt can do that, too, but in the span of a week, write down everything you spend money on, the old fashioned way with pen and paper and tally up the total. That figure might be enough to deter you or at least give the buy a second thought.
Saving money starts with planning and part of that is making sure you’re not spending frivolously and without thought of the much bigger financial picture.