Are YOU Spending Wisely, or Emotionally?

In the article, “The Cost of Whistles”, I shared with you a story about how Benjamin Franklin once bought an overpriced whistle from a peddler at a fair, and regretted it all his life.

What Franklin was trying to teach us with this story was that purchases based on emotion – desire & want – are almost always bad purchases. Whenever you emotionally pass the point where you can no longer “walk away” from the purchase, you are going to make a bad decision.

Franklin knew in his head that the whistle was overpriced and not a good deal, but he became emotionally attached to it and couldn’t walk away – and he regretted the impulse buy for years. One of the wealthiest men in the world regretted buying an overpriced whistle as a kid. Why? It wasn’t the whistle that was bad, it was the loss of self-control that was bad.

The whistle story is a great example of how to evaluate everyday “minor” purchases – the ones you hardly notice yet are draining money from your wallet at an alarming rate. I’m sure the whistle didn’t cost Franklin very much all by itself, but the lesson it taught him about spending money wisely was priceless.

Elsewhere on this website, I gave you an assignment to locate your “Latte Factors” and eliminate these expenses from your daily spending. Why? Because, as Franklin once said, “Anything is costly, no matter what its price, if it purchases nothing of importance…”

Eliminate the leaks and the “purchases of nothing of importance” from your spending and you’ll be well on your way to the debt-free reality you long for. It is rare that debt problems are caused by lack of income. Instead, debt is caused by not spending the money you have wisely.

Are Credit/Debit Cards to Blame?

Is it too easy for you to spend money? Maybe you’ve simply lost the connection between income and out-go? Mentally, you may no longer see that purchases put on a piece of plastic are actual out-go’s of cash. You look in the wallet and see there’s not enough cash to complete the latte, the fast food, the “Honey, stop on your way home and pick up a few things from the grocery store and I don’t feel like cooking tonight” purchases, so Plastic to the rescue!

Swipe and forget – and the balance due on your credit card statement grows larger and/or the amount set aside in your checking account to pay the credit card bill grows smaller – and you didn’t even notice it. Does this describe you? Be honest. Are you reading these articles to find some miracle way to get out of debt?

“A CHECK??? Let me see if I can find a pen – Geesh…”

Maybe what you need to do is start making it harder to buy things. Keep the plastic at home. Start writing checks (nothing will dampen your spending habits faster that the pain of trying to buy things with a check these days with all them “friendly” merchants sneering at you and making such a show of letting you and everybody around you KNOW what a big jerk you are for trying to actually write a check, for GAWDS SAKE!) or paying actual “cash” for things.

Keep a twenty in your glove box for emergencies (and forgetting to fill the gas tank should NOT be an emergency – but it often is, so now you’ve got enough cash to get you home) and keep the plastic at home. Painful? Yeah. Embarrassing to have to tell your co-workers that you can’t go out to eat with them because you don’t have any way to pay for it? You bet. But if you’re truly serious about getting out of debt – an absolute necessity!

Related Articles:

• Can You Get Out Of Debt By Eating Better?
• Credit Card Debt
• Payday Loans – Rip Off or Smart Financial Tool?
• I’ll Start Saving, Just As Soon As…
• We’ve Decided to RAISE our Borrowers’ Interest Rates