The philosophy of “buy now, pay later” is everywhere today. You see it advertised in stores, and this is, after all, the basic concept of the credit card: buy now, charge it, use it, and you’ll deal with the costs later. Of course, this is the simplest way to get in trouble, and to find yourself at the end of each month looking at the bills and wondering where your money went. The obvious way to save money is to not spend it, but that, of course, is not an easy task.
Pay Now, Buy Later
Here’s a thought: why not reverse the entire approach, and pay for an item now, but without actually buying it? How would that work? For example, let’s say you see an item that you really want, and you actually think you may need it (the much discussed difference between want and need is a lot blurrier than we’d like to accept today). So take the money out of your wallet and put it in the piggy bank, or between the covers of a heavy book, or in a separate bank account. Is it still there at the end of the month? Were you able to make ends meet, and cover all the other expenses, without having to use this reserve? And do you still want that item? Obviously, at this point you know you can afford it – you already have the money, so you can just go and get it.
The same principle, though slightly more complicated, applies to larger purchases, for which you need to take a loan. Try putting aside each month the estimated amount you’d have to repay on that loan. If it’s not a pressure on your budget, and you can manage easily, then go ahead and apply for the loan. Once you managed to put the rate aside for a few months, you may even have a considerable down payment, which will reduce the total cost of the loan, and you’ll be saving some cash in the process.
If You Can Live Without It…
Perhaps the biggest advantage of delayed spending is that you may realize you do not need that item at all. The most common purchase Americans make and never actually use is that of home exercise equipment. Of course, it’s important to watch your health and stay fit, but a stationary bike that gathers dust in a corner of your basement is not going to make you healthier or slimmer. If you want to do something, start small – you don’t need to buy weights right away, for example. You can exercise using a couple of plastic bottles filled with water. If you actually develop a workout routine and you use those bottles two or three times a week, then it makes sense to invest in weights. (Using bottles for a long period of time may cause wrist injury; using them for a couple of weeks won’t do you any harm.)
Wait for the Sales
Almost everything will eventually be put on sale, so just wait for the right time to make a purchase, and you can save a lot. This is particularly important for items that have a novelty factor added to their price, such as electronic gadgets, movies, books, and so on. When they are first released on the market, they cost a fortune. Wait for half a year, and their price drops to half. Wait a few more months, and they will most definitely go on sale – stores need to get rid of stocks to make room for the latest novelty items, so you may be able to get them for a fraction of their initial price – if you still want them, of course.