When you’re making a purchase, do you think about the cost of spending today vs. tomorrow or later? It's worth taking a minute, especially if it’s a big purchase that you haven’t planned, to think about this beforehand. The more you force yourself to stop and ponder this idea, the more quickly it will become commonplace for you.
If you spent today….for something today
Most people spend money on impulse, which is not recommended. Instead, take a few days to think about what you want to purchase. Can you live without it until you can save enough for it? Could you purchase the same item for less money? Maybe you wait for it to go on sale or buy it used?
You might wait and find you don’t need (or want) whatever you thought, in the moment, you absolutely needed.
The cost of spending your money in error (on something you actually don't need or want but fell victim to the impulse) can be quite high! If you purchase it, you’re probably going to spend more money than you can afford because the item isn’t in your budget. You might use a credit card which will cost you in interest even if you purchased an item on sale. It leads to Buyer's Remorse, guilt, and most importantly, it can lead to your future goals suffering as a result of your financial resources being misdirected. I
That’s the cost of spending today vs. saving for tomorrow.
If you saved today….for something tomorrow
We’ve heard about The Latte Factor which takes the cost of a $4 per day coffee drink, multiply it over a month or longer, to illustrate how much you could be saving if you quit the drink. Let me say that if you love your latte, by all means, leave it in your budget. It’s my theory that your budget is yours and if you want to spend money on a latte, then so be it. It just means we may have to take from another area for savings.
You need to have savings. What you’re saving for is up to you. It can be something big or something small, but imagine paying for an item that you saved for over a period of time? How great would you feel? Would you be able to pull the trigger and buy the item with an amazing peace of mind, confidence, and clarity?
A client of mine began her saving for tomorrow with $12 per month for an annual renter’s insurance bill. A year later she was ecstatic because she had the money for her bill when it came! Today, she's saving for her next car as well- won't that be a fun purchase?
That’s the power of saving today vs. the cost of spending today.
A little discipline of saving today means you can pay cash for things you enjoy or want to buy whether it’s a monthly massage, a new couch, or a new car.
The impact of spending today without having that money saved could cause you unneeded financial stress for months or years to come. That’s a choice you’re making and not one I recommend. Budgeting means you have the cash available to make your purchases, no matter how big or small, even if you have to wait to save the money. It's liberating!