Like you, I like stuff. People often mistake me as a tight-wad with my money. I, however, am not. I like nice things. It’s just that I make sure that I can afford them prior to buying them. I lack, what many people don’t: an entitlement complex. I feel that I’m not entitled to any thing. In fact, I believe that I deserve nothing. I feel this in order to purposefully reject the popular phrase “you deserve the best.” Because you don’t, and neither do I. I simply deserve what I choose to afford. That’s it.
I want a new bicycle. Do I deserve one? Nope. Should I take money out of savings to purchase one? Nope. Can I afford to drop $1,000 on a new bike? Probably. But I won’t do it. Well, not exactly. I believe in saving for things.
For instance, Mrs. Planner and I decided that we wanted to finish our basement. That means that instead of robbing our savings and investments, we decided to start from scratch and save money from our monthly income towards our basement project. That goal is now nearly funded. I refuse to start the project until the goal is funded, and I refuse to transfer the last couple of thousand dollars to cover the small deficit remaining towards the goal. This is how you are supposed to save for something that you want.
So, back to the bike. I want it. I don’t deserve it. I need to save for it. Let me explain what that savings process should look like. On a monthly basis we currently save for: retirement, Ollie’s college education, and other non-emergency general savings. If I add a new goal, a bike. Then I need to be prepared to contribute even more money to savings on a monthly basis. This does NOT mean that I should stop saving towards my other goals. This means that I must either cut my expenses further to save for the bike, or find more income to save for the bike. I honestly can’t think of another way of saving money that actually makes sense.
If you have struggled in the past with saving for and/or buying what you want, then it is likely that you haven’t followed the prescribed method listed above. DO NOT drain your savings to buy things that you “can afford”. I find that people that do this, often run in place financially. Remember, identify, save additional, accumulate, buy.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.