- Many of us today feel that incurring debt is a major way to buy things that you want and need. This could not be further from the truth. Debt is normally a step backwards when your goal is happiness and prosperity.
We work hard for our money, but the average person spends 90 % of their take home pay within one fifth of the time that it took to earn it. On the average 50% of the take home pay will go to debt. I feel the first step you take to get from debt to prosperity is to determine whether the items you buy are
necessary or unnecessary.
Is it greed or need?
To distinguish between necessary and unnecessary expenses is easier said than done. Some people feel they need new cars because older cars tend to have more repair problems. They feel you may be paying more for an older car than a new car. Some do not buy new cars because they feel new cars are too
expensive. Also, they feel you have to take new cars to the shop a lot to get the bugs out. They could both be right.
The type of car can also be a variable. I have long legs and I get cramps in my legs if I drive any distance in cars that do not have sufficient leg room. Some say big cars are hard to handle. Some say little cars are hard to handle on the highway. From an economic stand point, gas mileage should be a
major factor in the purchase of your vehicle and every day operation of your vehicle. Driving comfort and ease of perceived operation are safety issues that should not be compromised. There are inherent risks in both scenarios. The need for new or a used, big or small, and economy or luxury can be valid ones.
So, how do you measure the need verses greed scenario?
I use the weighted average method to resolve most of my decisions. Look at costs verses the benefits.
Write them down, but do not forget to weigh things like life threatening situations heavier than status,for example. Other purchases should also be evaluated in a similar manner. The key to most shopping errors is impulse buying.
Most people who do a lot of shopping have clothes in the closet that they will never wear because they buy when they have no specific purpose. Many say that if you do not wear the outfit within three months then there is a strong probability that it will never be worn. Analyze what you are wearing and what you are not and if you have unworn clothes, you may be in this majority category.
- Here are a list of several types of purchasing errors.
1. Shopping at the grocery store when you are hungry leads to impulse buying.
2. Going out to eat for lunch verses bringing your lunch can save you more than a thousand dollars a
year.
3. Turn out the lights if you arc not in the room. Turn down the thermostat two degrees.
4. Cable users have a tendency to purchase what they do not use.
5. Telephone extras arc not being used and maybe the cell phone fees can be reduced.
6. Will you really use that exercise equipment?
7. A phone call is much cheaper than a drive to see if the store has the item.
8. Shopping at discount stores verses upscale stores.
9. Shopping at grocery stores verses convenience stores.
10. Lottery ticket purchases should go to investments. - PLEASE EMAIL US YOUR COMMENTS.
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