Any financial action you take today will impact your life tomorrow. Don’t believe it? Think it sounds too dreamy? It’s not a fallacy, it’s a reality. The debt you accumulate today has to be paid off tomorrow. The loan payment you missed today will haunt you tomorrow. The car payments you keep missing could cost you your auto. The insurance payment you pay late every month could get you dropped from the insurance company.
Are You Emotional Or Practical?
Financial decisions can be emotional ones or practical ones. The emotional decisions are usually the ones you make on a whim; too many of those can get you into deep financial trouble. A practical financial decision is when you think before you buy.
Your Financial Wants
Emotional buying is usually for things you want vs need. Even though you cannot afford it you want to get your hair and nails done every week. Extravagant vacations at expensive resorts are the only ones you will consider taking. You always seem to hit a rough patch at work so justify eating out every weekend.
Your wants can get expensive. Wants can cause you to increase your already bulging credit card debt without a good reason. If you pile on credit card debt you mess with your credit score; which then leads to bigger financial decisions. A bad credit score will make everything you buy more expensive. Loading up on credit card debt to satisfy your wants can be seen as irresponsible. Increasing your debt to meet your financial needs is seen as survival.
Remember that satisfying your wants are generally to satisfy moments in time and have no lasting impact on your life. The problem is that they do have a lasting impact on your pocket book and entire financial life.
Your Financial Needs
Practical buying does impact your life because this type of buying is for the basics that you know you cannot do without. You need to pay your mortgage, make your car payment, purchase groceries and clothing for you and your family. Practically speaking if you do not pay those bills you know that you could lose your house and car and be on the street with no food or clothing. Or worse yet you would be forced to move in with your in-laws.
Your Money, Your Choice
You get to choose how to spend your money. You earned it so it’s your dime. You may just want to be more choosy on how and where you spend it. If you choose wisely you will waste less money and have more leftover. Spending on wants every once in a while is healthy. You just have to be careful to not make excuses for a frivolous lifestyle.