Before you Spend

If you have heard the phrase-“This is a once in a lifetime opportunity”,   You are about to spend some money that you haven’t budgeted for.   I have been thinking about all these “once in a life time opportunities” that we all seem to have options too.

Given it is Halloween today, Americans are expected to spend $7.4 billion on costumes, candy and decorations.  It seems like a lot for stuff that tends to get used once before ending in a closet.    I am being the Halloween Grinch maybe.  But Halloween perfectly illustrates this financial dilemma of one-time and, possibly, one use purchases and we are likely to spend money on Halloween every year (I was just about to call Katie to say to stock up on candy for all the door knockers tonight, still will).

The issue for me as a Financial Planner is that the chances you’re about to do something stupid is when we say out loud “just this once….”   I think I said this the first time I went to the Wimbledon Tennis, and I’ve been more than once or twice.

The solution is to put the decision in context.  Say, Ok how do you want to balance out that decision with your goal to increase how much to save this year?  What is the trade off, what are you going to cut from spending elsewhere?

Another solution is to implement the 72 hour rule.  That is, before you buy anything go away and think about it for 72 hours, it is amazing how much stuff you don’t need and don’t buy with the 72 hour rule.

Financial Advice Hawkes Bay “helping people make smarter decisions”

Published by Paul Sewell

October 31, 2014