Budget Sense

Your friends and coworkers are buying new cars, taking vacation after vacation, and seem to be able to afford anything they wish to get their hands on. You on the other hand, can’t find money to buy even the affordable items.

Why are your friends and others around you able to afford these items while you can’t? In fact, some of these people are not even employed, so where do they get the money from?

No, I am not feeling any jealousy or envy when I see others buying things that I can’t afford. It is a simple question of curiosity. I would like to know what these people are doing to be able to afford these items, when I am unable to.

Well, I have done a lot of asking around, and the results were a little disappointing. Most of these people couldn’t even afford what they were buying, they simply put it on their credit cards, line of credit, or worse yet, refinanced their home!

You see, it is not worth being jealous of what they are able to afford, which you can’t. They are simply borrowing to buy. But they will have to pay that money back, sooner or later, and with interest. In other words, they can’t really afford what they are buying, but they don’t care even if they have to borrow to buy it. Call it ‘impulse buying on steroids’

In our ‘5 Principles of Finance and Budgeting’, we talk about the need to be ‘patient and disciplined’ and it couldn’t be more applicable than in this situation.

Today’s culture of instant gratification and wanting something right away is not ideal and can’t be sustained forever. The financial meltdown of 2008 can be attributed, to a large extent, to all the careless borrowing and spending on things that people couldn’t otherwise afford.

This is why you need a budget, to allow you to save for things, so you don’t have to borrow and be in debt for a long time.