Do you waste money just because you are using your funds to deal with crisis after crisis?
I got a laptop last year because we visit our family overseas every year for an extended period of time and a laptop would allow me to work away from home. The decision proved extra prudent when I was in Hong Kong this year since I had to quarantine for 14 days in a hotel room and I don’t know how I would’ve passed the time if I didn’t have my laptop with me.
But remember how I play video games? Well, the laptop I got is smaller and the unit gets very hot at times, making games run a bit slow when the chips overheat. My friend suggested that I buy a desktop since there are deals to be had right now. Sure, I could do that. But wouldn’t the laptop purchase become a waste of money? I could sell it, but then I wouldn’t have a laptop when I travel again to visit my family next time. I could buy a laptop again when we go next time, but doing so and repeating the cycle over and over is obviously ridiculous.
Buying, selling, and re-buying the machine while losing money every time does sound ridiculous right? I know just about everybody agrees, but why do so many do this with other areas of their lives?
Instead of buying their cars outright or at least financing their cars at low rates, they choose to lease, re-lease and lease vehicles over and over. Instead of buying food in larger quantities and just separating them into each individual packages themselves, they buy small quantities at inflated prices over and over. Instead of buying a few quality pieces of clothing that look nice and last forever, they buy low-quality items that get ruin after a few wash cycles, so they have to buy more clothes over, and over, and over again.
The list goes on…
Fortunately, the fix is simple. All you have to do is take a bit of time to have a plan for your spending.
My former cleaning lady financed a new car a few years ago. You would never guess why she got herself a new ride. She bought a brand new vehicle because her old car broke down and she couldn’t afford to pay for the repair. What?!?
If she would’ve gotten an emergency fund like we so often tell everyone to do, she wouldn’t have to pay a couple hundred dollars every month for years because she couldn’t afford to pay $800 upfront. Maybe I should ask her to read this site!
This is a pretty extreme example, but it just goes to show how important an emergency fund actually is. You won’t know when a car breaks down before it happens, but anyone who plans will know that a car will eventually need a costly repair.
You won’t know when you might have a craving for another soda, but you can just buy a few at discounted prices and put it in the fridge instead of needing to make a convenient store run every time you get cravings.
You won’t know when your $10 shirt will look so worn it’s better to use it to mop the floor instead, but you can totally buy a $50 quality shirt that will last over a decade while looking beautiful the entire duration of its life.
Debt is like that too right? You don’t have enough money, so you borrow to pay for it. Then, you are using a ton of your money just to pay for interest to service the loan.
If you planned for it and paid for it in cash, then you could’ve saved a ton of money.
Planning. It doesn’t take that long to do, but it does take intentional focus.
When was the last time you planned? I suggest you take some time today to do so.
Think of it as part-time work where you are the boss that pays VERY well.
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