Can You Really Afford It?

It’s amazing to me how much people spend most of their discretionary income on things that don’t actually matter.  Want to see an example?  Try going to a major mall or even a designer store and just observe how people shop.  Pretend you are a reporter about to do a research article on people’s spending habits and just see how much people spend on a simple transaction.  It’s true that consumer spending is down in the current economy but it doesn’t  stop people from whipping out their credit cards and spend without thinking about the future impact of that spending decision.



Another thing to actually observe is see how many people are spending with cash rather than credit cards.  You will more than likely notice that most cash purchases will be quite small amounts vs. credit cards for bigger purchases.  I keep telling people that when you pay cash, you actually feel it more and have more skin in the game.  You feel almost nothing to pay for items worth a few hundred dollars with their credit card.  So, make the right decision and ask if you can really afford the upcoming payment if using plastic.  If you can’t pay for it in one billing statement, it’s possibly not a good idea.



Can You Afford It?

So, how can you tell if you can afford an item or items if you are paying cash or with credit cards?  Easy, simply ask yourself the basic needs vs. wants question.  Is this something that you really need or is it a luxury item that you want. 


I once heard Oprah say that how she shops is she always asks herself if she really needs the item and if it can benefit her life.  She then comes back to the same possibly purchase in 7 days to see if she feels the same way.  Imagine if everyone spent this way?  How much better ­­would most people’s quality of life and financial position be?  Also, take into consideration that someone like Oprah is worth more than a billion dollars and you start to see the picture.  How much more people are out there that really can’t afford their purchases yet do it anyway?

The whole point of this post is to make financial savvy decisions and keep yourself out of debt.  Here’s to debt reduction and wealth building.

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Category: Financially Elite Blog

  • rebecca flavin

    Most of the purchases people make are from momentary compulsion.
    When shopping the instant gratification plays a major role. Only if we stop
    before bringing out the credit card and think twice we can stop ourselves from
    splurging. Giving a second thought will save a lot of money.

  • Anonymous

    Sure thing, I live on a mostly cash only budget myself and it keeps me out of credit card debt.