Pay Attention To Every Penny
Financial freedom means increasing your awareness of retailers’ motivations, friends’ influences and any circumstance where you feel an immediate urge to part with a significant amount of money.
It’s important to develop the skills of a savvy shopper. You have access to money, but you should realize how you use it all of the time. The biggest temptation is the impulse purchase when you’re making decisions with your emotions and not your critical-thinking skills. Resist impulse buying by taking these steps when shopping:
- If you see something appealing, wait at least 24 hours before purchasing.
- Calculate how many hours you must work to pay for it.
- Determine how the item will improve your quality of life.
- If you still want it, shop around for the best price and create a plan to pay for it.
Friends Don’t Let Friends Waste Money
Sometimes you’re in situations with your friends where you feel pressured or compelled to show off by spending a lot of money and just throwing purchases on your credit card. Recognize these moments and avoid regrettable decisions. You—not your friends—are responsible for your own debt.
- Leave your credit card at home.
- Invite friends over instead of heading out for entertainment.
Credit Card Costs
When you do choose to pay with credit, your minimum payment due typically will be 3% to 4% of your total balance. Making minimum payments on your debt extends its life while the interest charges pile on. You could end up paying 133% or more of the cost of the item based on the interest.
- Pay the full balance each month. If you can’t, create a plan to pay it off.
- Pay on time to avoid raised interest rates.
- Watch the interest rate. Most cards offer a variable rate, which fluctuates.
- If you lose your card, contact the issuer immediately.
Below are some more tips on controlling your spending. You can also access PrimeWay Federal Credit Union calculators that show the benefit of spending less and how brown-bagging your lunch at work really adds up.
Ways To Reduce Spending
| || |
|If you… ||Maybe you could… ||Or… |
|Suscribe to cable TV movie channels ||Convert to basic cable ||Cancel cable and borrow movies and books from the public library |
|Dine out for lunch each workday ||Bring lunch from home every other day ||Bring lunch from home every day |
|Dine out with friends frequently ||Invite friends over for dinner ||Host a potluck dinner |
|Watch movies in the evening ||Take in a lower-cost matinee ||Catch second-run shows at a bargain theater |
|Use Internet with high-speed access ||Use dial-up access ||Use free access at the library |
|Drive a car for transportation ||Join a carpool for work ||Use public transportation or bike |
|Buy a new outfit each month ||Buy a new outfit every other month ||Shop at discount stores and second-hand shops |
|Buy two cups of coffee each day ||Buy one cup of coffee each day ||Bring a thermos of gourmet coffee brewed at home |
|Buy expensive birthday and holiday gifts ||Plan ahead and buy gifts on sale or off-season ||Make gifts or give gifts of your time |
|Smoke two packs of cigarettes per day ||Smoke one pack a day ||Quit |
|Drive a luxury car ||Drive a simple sedan ||Ride a bike |
|Attend a concert each month ||Go once a quarter ||Purchase and download the music at home |