This is Personal Budgeting 101 and is one of the best pieces of advice I have ever been given. It’s a really simple concept. Each time you have an urge to buy something shiny and new, ask yourself this one simple question:
Is this a need or is this a want?
Do I need or want to buy new school shoes for the kids? The answer here of here will usually be need. Do I need or want to buy the new 50″ plasma tv that is 3D capable? The answer here will probably be want.
I follow my own advice about 98% of the time and it has saved me from many an impulse buy. Using “need versus want” together with “save before you buy” principles has benefited me in these tough economic times. The GFC (global financial crisis) had no impact in my life because I don’t have a debt portfolio to manage. One dwindling mortgage is all I can lay claim to.
Mum and Dad were not fans of hire purchases either and always encouraged us to save up the money first before making a big purchase. It’s something I have always remembered and advice I have always stuck too. So even when finance companies increase their interest rates, it has no impact for someone who isn’t burdened with large debts. Sorted and Simple Savings would have to be the two best websites I have found for learning how to live within your means.