Are you a dessert diner? Do you like to buy things that you can't really afford right now, just because you want them right now? If so, you need to read this blog. Actually, this concept came to me when I was eating out last week. I've got a terribly sweet tooth and when I go to a restaurant my mind is always on the desserts before I even get to the mains or the starter. In fact, if I could get away with ordering just three desserts, I probably would! It was this desire that made me realise that's how many people spend these days.
Why? Partly because it's so easy, because everything is available right now with credit. Credit is everywhere. Every retailer wants us to have everything right now because they're trying to make money out of us and every bank wants us to borrow money right now because they're also making money out of us. The problem is that's not actually good for us in the long term. If you're trying to build a secure financial future, perhaps pay off your debts or a mortgage, or retire early and live the life you want to live, if you start borrowing a load of money to buy stuff that you want right now, just because you can't wait for it, you’re digging yourself into a very deep hole that is going to be very difficult to get out of.
For a minute, I want you to cast your mind back to how things were in our grandparents’ day, when credit wasn't readily available. If they wanted anything, they had to save up for it. It was quite tough in those days. Even things which are quite basic, such as new clothes or a household appliance, could only be bought if you had cash. That’s just how things were. Now, I'm not saying things aren’t better these days – as we all know - standards of living are higher in many parts of the world, but just because we can buy many things on credit, straight away, it doesn’t mean that we should. It's all about striking the right balance.
Compared to our grandparents, these days most of us have a completely different mentality. Whereas our grandparents couldn't buy now so therefore had to save if they wanted to improve their circumstances, many people now borrow money to have all the stuff they need right now with no thought about how that's going to impact their financial future. Of course, the bad news is (and we all know this, even though we don't really want to think about it) is that, at some point we're going to have pay back all of those debts. And the longer you have those debts, the more you’ll have to pay back because the interest and other charges accrue on top in quite a scary way.
So today I want you to think about achieving some balance when it comes to spending money. I don’t want you to become either a dessert diner or be just like our grandparents, saving everything and not having any fun now. Life is about enjoyment but it is also about having that right balance. Yes, treat yourself with some things right now, but don't jeopardize your financial future. And one way to do that which is quite simple but very effective is to have a plan.
Having a plan (also known as a budget) will ensure that, firstly, you’re living within your means (i.e. you’ll spend less than you earn) and, secondly, that you’re able to set some money set aside, every single month, to spend on fun things. Many people don’t like to hear the word ‘budget’ but the truth is it doesn't have to be anything scary and it’s actually much easier than you might think, even if numbers aren’t your strongpoint. There’s plenty of advice on my site and about a million articles on the internet which will take you through the process, step-by-step.
The second thing I want you to do is to try to resist those impulse buys. When you feel the urge to buy a ‘treat’, but you know you don’t have the cash to do so, don’t just reach for the credit card. Think twice about how you're going to pay for it before you put your hand in your pocket and hand the card over. At first you might find this a challenge but, if you stick to it, you’ll be surprised at how quickly you can change your habits for good.
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