Posted by Mike Smith :: November 11, 2008 @ 6:25 amThere are many different methods to avoid spending money on unnecessary items, from freezing your credit card in a block of ice to saving up the necessary cash first before making a purchase. There is also a simple way to limit the number of luxury items you a planning to spend money on.
The basic idea is to keep a running list of any wants items that you would like to purchase. By setting a strict limit on the number of items on your list, you’ll also limit your spending. I find that 3 items is sufficient. If you see a new item that you can’t live without, you may reconsider when you realize that you’ll have to remove another item from your list to add the new one.
You can add time limits to the list as well. For example, you might decide that you can only purchase one item from the list each month, quarter, or year. That way you won’t be tempted to simply purchase one of the items on your list to make room for a new want item. Dollar limits can work as well. If you allow yourself $100 a month for want items, then more expensive items would have to remain on your list for a longer period of time. If they are still on the list when you’ve saved sufficient cash, you will have demonstrated that you truly want these items.
If you use Amazon.com for price comparisons, you can keep your want list online. Their “Wish List” feature lets you add items that you hope to purchase. By sharing the list, you can inspire others to buy the items for you when they are looking for gift ideas.
A want list works really well for people who diligently save for their purchases. Allowing your list to contain multiple items will inspire you to keep saving. Limiting the number of items on the list will focus your efforts and help to prioritize your discretionary spending. Even those who abuse their credit cards can benefit from this method. By adding an extra step to the purchasing process, you can break the See-Buy-Regret cycle that you’re accustomed to.
One of the items on my want list is a set of lenses for my camera. What would you put on yours?
1 Comment
Entertainment (movies, theater, dining out) should definitely be on this "want" list. They are not necessary and you would not die if you don't have them. Also, vacations should always be considered a luxury, and people should not take one if it impacts your finances. How about iPhones and the latest gadgets?
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