2006 (c) creditplushealth.com
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You Always Want What They Have Which You Don't Have |
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Financial Peer Pressure You see it, you want it. That's part of being human - no matter how old you are or how much you have. People are forever looking at what other folks have - new clothes, a new car, a new CD - and thinking that they would like to own it, too. Buying things just because they are "what's cool now" can leave with you very little or no savings and a closet full of purchases that you really don't use. According to Linda Goodwin, president of the Children's Financial Network in Chester, NJ, the first step is to accept that you are not going to have it all. "There are choices in life, including financial choices. We all make financial decisions that may not be the best, and we need to live with the consequences," she says. Make a budget - a first step to curbing impulse buying To help you make your financial choices, look at how much money you are likely to have over a set period of time - for example, the next three months or a season like winter (December through March). Start by writing down your allowance and income from regular employment. Consider any events where you might receive money as a gift - like a birthday or holiday. Don't include any anticipated gifts in your budget. Wait until you actually receive the gifts before including them. You can always revise your budget to include any changes to your income. Next, write down the things that you want to do or buy during the period and how much each is realistically likely to cost. (Don't worry about items that your parents will cover.) Things you need to plan for might include clothing, sports equipment and activities, such as concerts and eating out. Are you saving for any long-term financial goals, such as college or a car? Do you plan on giving any gifts? Will some money go to charity? Is some cash for spontaneous purchases? How to decide what to buy - ask yourself these questions If, after making a budget, you discover you want more than you can afford, you'll need to decide what things to get and what to skip. In other words, consider prioritizing the items you want to buy. Maybe there are some items that you can postpone purchasing. You'll have to make some tough choices, and to help you, here are some questions to ask yourself about each item. There are no right or wrong answers. These questions are to help you reflect on your purchasing decisions: Why you want the item? Your best friend might have a new computer game. Do you want the game because you think your friend's cool or because you actually want to play the game? It's also important to ask yourself if you're trying to keep up with the spending habits of a wealthier friend. It's important to remember that there will always be people who will have more or less money than you. Buying something just because someone has the same item is not a good reason for making a purchase. Will you use the item more than once? Wanting can be more compelling than having. Don't blow a big chunk of your budget on something that never sees the outside of your closet again. Will a different purchase make you just as happy? Maybe you can't afford a whole new wardrobe this period, but maybe one or two shirts will be enough to spruce up your look. What are the things you won't be able to do later if you make this purchase now? Buy an expensive pair of jeans, and you may not have the money to attend a concert next month. How will this purchase affect my plan for one of my long-term financial goals? Too many concert tickets now could put off the day you buy a car, and too many expensive athletic shoes now could put that big ski trip out of reach. What if your spending choices match those of your friends? That's fine - so long as they really are your choices. Get in the habit of making your own decisions about money, and you'll probably be happier about each dollar and purchase you make. Finally, don't ignore your past mistakes. If last year you ran through your December holiday money by the first week of January, you might try to pace yourself this season. Or maybe you bought a CD on a friend's recommendation last year and hated it. You might think twice about taking his advice again, or decide to borrow the CD so you can listen to it before you head to the store. By younginvestor.com
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Credit Plus Health By Sean Toh All rights reserved.
