Saving versus spending

Purchasing things gives us a sense of power and especially when we use a credit card to make those buys. You walk into a retail store with $52.00 in your wallet, $364.00in checking, and $1,070.00 in savings and walk out with the exact amount of money plus whatever items or items you "just had to have" from the vendor.

You have a great rate on your credit card and the minimum monthly payment is low at 2%. With an interest rate of only ten percent, it would take one 50 years to pay off the balance at minimum if no interest was added but the balance will double every ten years (actually much less since there a probably fees involved like annual fees and special transaction fees).

You find saving money hard because for every dollar saved you have once less dollar to spend. Are yoiu forever stuck in this determintal financial lifestyle?

We spend money we never see but force ourselves to open our wallets in order to save. If we could reverse this process, saving would be much easier. We can.

I have a jug at home and each payday I put $10.00 in my jug. On the next payday, I put another $10.00 plus all the money I have left in my wallet goes into that jug. All my spare change goes into another container on a daily bases. When I can actually see and feel the money I've saved I feel better and I find it addictive, I soon begin to l,ook for ways to spend less.

Since I don't use credut cards, I have to actually open my wallet everytime I want to make a purchase. I don't use my bank card to make purchases either as that still makes one have the feeling that its not real money being spent.

Sometimes I wish I had a credit card so I can buy the things I want when I want them but that would only serve to reduce future income (by an amount much greater than the cost of the item bought) and if I can't live off what I make now or don't have any extra to save, then I certainly don't have any extra to spend.

Each week my money is deposited directly into my checking account. I stop by the bank and make a withdrawal of my allowance each payday. A certain percentage of my pay is saved in my retirement account before I get paid and a certain percentage is saved in a money market account after I get paid. If I spend all my money before next payday then I do without. I have to make spending decisions wisely.

If there is something I need and have to have it now, like a car repair, then I can take it out of the money market. If it is sometime I need but it doesn't have to be right now, I can budget for it or find alternative means. An example would be if my lawnmower quit, I could hire someone for a few weeks to cut my grass or I could just use the push mower, or I could borrow a mower from a friend or neighbor.

If one follows a sound savings and spending policy, then one doesn't need credit cards, even for an emergency. That may have been a good excuse back when we had to write checks but it certainly isn't an excuse today. The truth is, it wasn't a good excuse way back when. During my college days, I had gone to visit a friend of mine and found my the unfortunate victim of a muggler. (This was the days before most banks used computers and the smaller banks which did rented computer time from bigger banks). I went to a local Western Union and had them wire my bank for emergency funds. In a few hours I was good to go again. No credit card needed: only a good savings plan.