Can you afford it..?? This is a very weird and absurd question. But in today’s inflation oriented economy it is very important. Many people buy those things which they can’t even afford to buy. They arrange for funds by taking a loan from bank, credit cards and advances from their offices and many other ways to arrange funds.
Arranging funds ultimately means a liability and which is something that you need to pay back in future it can be with interest or without interest it depends on the source from which you are arranging money. Most of the people spend money more than they earned by borrowing and some spend more money when they get there salary and for the rest of the month they try to curtail even small expenses.
The problem starts from here only when people do not know how to manage their funds. The things on which they are spending so much do they really need it? Are they able to afford it? Are they able to carry it? Is this the right time to buy it? Do you really deserve this? These are so many general questions which a common man has no answers. A common man daily goes through these questions but he has no answers to these questions and he keeps on spending more whether his pocket allows him or not.
Supposes Mr. A earns $1000 a month. He spends most of his earning in the beginning of the month on wasteful things such as going in an expensive holiday with his family buying luxury items which are not required. And for the rest of the month he curtails his small requirement. Have you ever think why you are spending money on unnecessary things? Many people never think because they have to just follow others. They spend money as other are spending without knowing there requirement and budget.
Taking loan from banks is another example of spending more than you earn. As loans are easily available now a days so everyone is running to take loan without even thinking how they are going to pay back, what are they consequences you have to face, in future what if you are unable to return the loan taken from bank. Bank can cease your property can land you in jail and many more consequences. If a person wants he can easily curtail his expenses by postponing it to future.
Another very important example which cannot be ignored is Credit Card. Credit Card is a facility that is provide to when you face problem to buy your requirements, don’t treat credit card as extra money to spend. But in today’s world there is more misuse of it rather than using it as emergency. Credit cards are most often used to buy luxury items which are easily avoidable but are still purchased. And in the end you are filled with so many bank repayments and that too with a high interest rate.
There are big questions why to go for these luxuries if we can’t afford it and are not required. And even if required there is always a cheaper solution available for your requirement. But you always want these luxury items because your neighbor has one or your relative or any other person is enjoying these expensive products. Many people do not think wisely whether they should go for it or not.
Apple iPhone is a very good example over here. It is the most expensive phone but people are buying it when they can use a cheap phone with same features, quality but they always need Apple iPhone because it’s a big brand. Now a day’s people are selling expensive things which are not worth it. There is always a cheaper option available to you but still people run after big brand products.
The problem of spending more than earning lies within a person. You are fond if watching television it is not necessary that you should have a LCD you can easily have a normal TV. It will just be a waste of your hard earned money if you go for an LCD when your budget doesn’t allow you. Before making a big purchase which need lots of money think twice before spending can you afford it? You can take advice from a financial advisor whether is this the right time to make purchase or not.
One very good way to save money is to buy at the time of discounts when numerous of offers are available in the market. Buying during sale helps you to save major part of your earnings.
Firstly draw a financial plan, secondly track your spending means you should know where you are spending, how much you are spending, make a list of your spending so that you know where you have to spend and where you have to cut back. Pick the things wisely to avoid wasteful spending. A thing to remember is that do not make your house money pit on which there is no end to spend money.
You should always maintain a separate account for your savings so that you can use that saving when you need them most. You should know how to stop yourself to buy a wasteful thing.
Can you afford it..?? The answer of this weird question lies within your requirements and you’re earning. You are the best person to answer this question because you know what you need and how you can stop yourself on buying unnecessary things.