Forward spending - spending the money you don’t have
Do you spend money that you don’t have yet? Do you have credit cards? Then you are forward spending.
More and more retailers are encouraging consumers to buy the things you want now and worry about payments later.
Deals such as buy this expensive plasma TV at $1000 off the list price and you only start paying 6 months from now. Or buy that latest laptop and pay only $20 a month. These are very very enticing deals that bombard us every day. I myself wanted to give in to these sweet deals.
One thing I do to overcome this spending itchiness is not to buy on impulse. That’s hard specially on those time sensitive deals where you get the offer only if you call within the next 30 minutes. But you want to know a secret? Even if you call 2 or 3 days later, they will still sell you those stuff at the same price. The “next 30 minutes” is just a way for you to call now.
Here are some tips I use myself as a guideline for forward spending.
1. Do you really need it?
Yeah the nice 30inch TV that costs only $499 might be a good deal but do you need one? If you have an unrepairable busted TV, then that’s probably a good deal but if you are just buying it because it’s cheap, well, that’s the worst reason to buy.
2. Wait about 2 days and decide if you still want to buy.
In most cases, the feeling of buying it won’t be as great so you can make a better decision.
3. Before buying, look at your credit card balances and all your outstanding loan.
Once you know you are in deep debt, you won’t have the urge to make it worse.
4. Pay in cash.
Yes credit card is good for convenience but if you have a spending problem, cut it out and use cash. Ask if you can get a better price if you pay in cash. If not, ask for freebies if you pay in cash. You’ll never know unless you ask.
5. Use credit card only if you will pay in full.
If you have some control of yourself left in you, go ahead and use credit card but be sure to pay in full before due date.
Tags: credit-card, forward-spending, incredible-deals, spendingRelated Stories
POSTED IN: Finances
2 opinions for Forward spending - spending the money you don’t have
Blaine Moore (Run to Win)
Aug 1, 2006 at 7:39 am
A few years ago, I knew that my television was not going to last much longer. I decided to buy a big screen television earlier rather than waiting because I only get cable television during football season, so I bought the TV at the beginning of the season so I could make better use of it. I had the cash to pay for it, but I did one of their deals where you have 0% if you pay it off in a certain amount of time. That way, I was able to keep my cash reserves on hand earning interest and spread the payments out. That money that was tagged for the TV was never spent except on TV payments, though, so I always had enough to cover it if I needed to.
Most of my purchases are like that. Now that I finished paying for my truck and have bought a house, I plan on making all of my future payments and purchases like that.
Noel
Aug 1, 2006 at 8:24 am
Hi Blaine! Thanks for sharing that.
That’s a great deal, 0% and payments are spread out. The key there is not using the payment money to buy something else and leave it in the bank earning interest.
If only a lot of people had the same discipline as yours in setting aside the payment money and not using it for something else, then people won’t be burdened with big debts.
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