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How can I make better decisions when buying things?
I'm 19 years old and I don't have a job just yet (but I did just have a job interview a few days ago, so I have high hopes that I'll get the job). I know you probably are aware of this but please don't ask me where my source of income comes from, all I'm going to tell you is that I do little "jobs" here and there to make what I have. I live with my parents still and they buy me the things that I actually need to survive but the things that I say I "need" are really more trivial luxury items.
Now, the problem I'm having is that I don't really know how to plan ahead very well as far as saving money goes. Not only that, but I often find that the financial decisions I make are only temporarily efficient but in the long scheme of things, I don't always have enough of what I need or enough money to be able to afford what I need. Obviously when you buy something, having it be dependable/usable for a decent amount of time is a must. For example, you probably wouldn't spend $499.99 on an iPad, if it were only going to work for a week. Often times when I like something that isn't reusable (like a soda for example) and it's at a generally low price, I'll stock up on it using all of the money that I have, thinking it will last me longer than it ultimately does. It isn't until I start getting low that I slow down my consumption until I have enough money to do the same thing all over again.
For example, I'll buy seven packs of a brand of gum that's $3.48 per pack. After I'm done buying all of those packs of gum, I'll usually have like two or three dollars left in my wallet. I'll go through a pack and a half of the seven packs in the first two days, then I'll finish one entire pack of gum the following day, then I'll go through like three more in the next two days and then I continue consuming like that until I'm down to my last two packs. Once that happens, I begin to panic and I don't touch the remaining two until the next time I get money. Than as soon as I get money I buy as many packs of gum as I can afford, than of course I have the two left over packs of gum plus whatever I just bought. Now, it suddenly seems like I have enough gum to last me three weeks, so I start chewing as much as I can until I'm back in the same position. All of the sudden, I start using my money to buy soda (which is more expensive in this example), and I can't decide which one I want more; the sodas or the gum. I've been spending like that for quite awhile and I need some advice.
3 Answers
- UrsugardaddyLv 78 years agoFavorite Answer
We can not tell you how to obtain self control. You have to want to save. Simple when you get the feeling to spend some cash just log on to this website http://www.treasurydirect.gov/ and buy some I-Bonds or add a small amount of money into that account. Input the amount and forget about it until the next time you receive some money. Trust me that you would not even think about logging back on the site and getting some money from that account anyway at least this way your money would always stay above inflation...Get yourself a Roth IRA. Its better to lay the foundation now so that it would be a lot easy within the future. Saving money is hard but once you get started, the money would do all the work for you. You are young so I strongly suggest that you get your self a Roth IRA account asap, if you do not have one. You can never go wrong with investing and saving for your future. You have many years of compound interest ahead of you. You could be a millionaire before you reach your retirement age so if you do not have a Roth IRA than get started with the Roth IRA account by contacting T-Rowe Price or Fidelity. Yesterday is History, Tomorrow is a mystery, its all about what you do in the moment. You can get started today. It is suggested that you pick the Roth IRA target year fund set for the age 65.
https://individual.troweprice.com/public%E2%80%A6
https://investor.vanguard.com/corporate-%E2%80%A6
Get the Roth Account first than branch out into other investments, once you study and learn about investments. The target year account would adjust on its own. Don't waste your life and later on down the road, you would have alot of regrets. Once you get a job that offer 401(k) or 403(b). Take advantage of the company 401(k) or 403(b). Never leave free money on the table. Get this started today
Take Care
- ?Lv 68 years ago
Hi Bobby,
Ursugardaddy gave some great advice, but my answers will be on a much smaller scale because he knows a whole lot more about that than I do.
I tend to do the same thing you do: I stock up on stuff and because I do, I tend to go through things quickly. I figure "It's there so I might as well use it." I am trying to break myself of that by telling myself that just because it's there, that doesn't mean I have to use it all up in the first few days. Sometimes I'm successful and sometimes I'm not; it depends on what the item is. But I'm trying.
Something else I'm working on is asking myself "Do you REALLY need that right now?" and "Is there something else more important you need to spend that money on?" and "Wouldn't it be nice to save that money rather than spending it on something you don't really need?" Those types of questions have helped me cut back on spending money friviously. It's not adding up to hundreds of dollars, but every little bit helps.
Since you're still at home, this would be a good time to get yourself in habit of "saving for a rainy day." When you get out on your own, there will ALWAYS be something coming up that you hadn't expected or planned on, and you'll need some extra money to pay for it. It could be something going wrong with your car, or a medical/dental expense, or your phone poops out and you have to get a new one, and numerous other unexpected "surprises." If you start saving now, even just a little bit, you'll be in the habit of doing that later on and believe me, you'll be thankful to have a stash set aside.
Instant gratification feels good, but being able to pay for unexpected expenses feels a whole lot better.
Deb
- RadDadLv 48 years ago
Dont start saving money until you have your career job. Just enjoy life right now and buy things u like and go out to eat with ur friends a lot.
