If you are currently struggling with the stress of debt, ask yourself one simple question. Are you spending too much money on the lifestyle that you want, rather than the lifestyle that you have? If you answered yes, then it’s time to get a little wiser about your purchases. Managing your money better will allow you to save money, avoid debt and enjoy your daily life more.
Watch Your Purchases
Many people max out their credit cards purchasing items that they only use occasionally. Have you ever bought new clothes just to wear on your vacation or purchased new, top-of-the line golf clubs, so you can impress your boss once a year? Buying specific products to meet an occasional need can cause a kind of disconnect, leaving you feel dissatisfied, unhappy and downright broke.
The things that you do every day actually matter more than those activities that you only do every once in a while. You would probably be better off not buying any products that represent your fantasy lifestyle. Instead, invest those funds in things you can use in your current lifestyle. If you truly desire an item that you’ll only use occasionally, then consider getting a prepaid card so that you don’t run up a revolving credit card balance.
Before buying a new item, ask yourself how many times you think you’ll actually use the item. Then divide the purchase price by that number. The lower your total is, the better the buy.
For example, you might find a great little black designer dress at a fantastic discount, but you know you’ll only wear it a few times. You also spot an attractive cashmere coat at full-price that will keep you toasty through the winter. The coat might have a higher original purchase price, but you know you’ll wear it almost daily during cold weather. The coat, therefore, would have a lower total number and be a better buy because it fits into your current lifestyle.
You also don’t want to have too much house for your lifestyle. If you have a family of four, do you really need five bedrooms? Only buy the amount of house that you and your family will actually use. Anything more than that and your extra space can cost you a bundle on your home loans, taxes, insurance and utility bills. If you are house rich but lifestyle poor, consider moving to a smaller home.
In summary, start making financial decisions based on the everyday life that you actually live instead of the life that you want. Investing in your everyday lifestyle should save you money while making you feel more fulfilled. Use a prepaid card to purchase any items that you’ll only occasionally use. The prepaid card will help you watch your budget. You should feel less stress because you’ll have less debt.