Do I Really Need This?

Thu, Oct 14, 2010

Financial Advice

Hi everyone,

It’s James, and I’m here to now discuss the spending side of the equation. Previously, I’ve discussed the importance of saving and issues surrounding retirement. Now I’d like to discuss spending. America is no doubt a consumer-driven society, and we are bombarded with constant advertising carefully constructed to stoke our impulses to buy. It doesn’t matter whether we actually need the given item or not, we often give into the impulse to make a purchase. The next time you’re about to spend some of your hard earned money, think deep and hard about whether you actually need the item you are about to buy.

Many of us attempt to derive satisfaction through shopping. Buying something can cheer us up, or it can serve as a replacement for another facet of your life which is lacking. Take a moment to review your past few week’s worth of purchases, and classify the items as to whether you’d actually miss them if they disappeared. Obviously, given spending like to pay your mortgage or rent, keep the lights on, feed your family, etc are absolutely necessary. But, if you conduct this review, then you’ll soon realize how many of your purchases do not really serve a tangible need. Eliminating these purchases and diverting the funds into a retirement account or savings fund towards a new home or other large ticket item provides a greater sense of satisfaction in the end. The trick is to tame your urge for immediate gratification. Back with more later,

James

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