Everyone knows that youngsters have the mentality of, “I see it, I want it, and it’s mine.” What’s sad is that this is becoming the mentality of adults as well.
Our debt load continues to rise because we continually want more and more. It’s time to evaluate the way we shop and stop all of this impulse buying. Here are four common myths that consumers believe about spending and the truth behind them.
Myth # 1
This is a great deal so I have to buy it now! I’ll just put it on the credit card.
Truth: Unless you pay off your credit card immediately, this will not be a great deal. Saving ten pounds on that pair of shoes you want sounds great, but once you start paying interest on your credit card those shoes will become mighty expensive. A good rule of thumb is to never put anything on your credit card that you cannot pay off before the grace period has expired.
Myth # 2
It’s just five quid. It’s not going to make it a dent in my monthly budget.
Truth: Every pound counts. If you are spending £5 a day on a coffee and a sandwich, that is £100 a month. Just think what you could do with that money if you saved it instead and had £1200 more a year.
Myth # 3
It makes more sense to buy things when they are on sale then to wait until they go back up in price again.
Truth: It only makes sense if you have the money to purchase the item in the first place. As myth #1 pointed out, putting those kinds of purchases on your credit cards is not a good financial move.
Myth # 4
I just have to have this right now!
Truth: No you don’t. This is the hardest part for most consumers to understand. There is a great difference between needs and wants, but the lines often get blurred. You need food and water. You do not need the newest Kindle. The first step in becoming fiscally responsible is to clearly understand the difference between needs and wants.
Track your spending for a month and see where your money is going. You will be surprised at how many areas you can cut back in and save a lot of money. Try it and let us know the results!