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Financial Tips

How to Save Money : Finding Cash to Balance Your Budget


We all know, deep down, the difference between something we want and something we need. But sometimes we’re swayed by a torrent of advertising, or our emotions, or a spouse’s feelings. Confusing wants with needs is a main reason for the success of the credit card industry.

If you’re going to maintain a successful household budget, however, this is one of the key battles you’ll have to win. Letting a “want” slip into the status of “need” too often will undermine your progress toward debt reduction.

Let’s review the definitions:

“Needs” are the basic necessities of life – food, a roof over our heads, clothing, utilities, insurance, etc. For most Americans, a car of some kind is a need, but the coolest car in the showroom? That’s a want.

“Wants” are everything else -- televisions, mp3 players, stereos, toys, movies, knick-knacks, gadgets, garden gnomes, and, oh, yes, that killer purse you saw, even if it is 30% off.

What’s your best defense? Complete honesty with yourself. Why are you thinking about that purchase? See if these reasons sound familiar:

  • It looked great in that ad on TV.
  • I’m feeling down, it’ll help me feel better.
  • It’s on sale! (A classic.)
  • This would really impress Bob.
  • It just came out! I want my friends to see how cool I am!
  • She would be so disappointed if I didn’t.
  • Kim had one of these, and she said it was so great.
  • Hey, this is a really well-made brand. It would last forever.
  • (Last, but definitely not least.) I just gotta have it!

All of these are things we tell ourselves to justify a purchase we know we shouldn’t make. Usually, if you resist the impulse, your life doesn’t really change and people don’t like you any less. Also, your household budget will thank you.

If you’re having trouble resisting – and sometimes, we all do – at least run through this checklist first:

  • How am I going to pay for this? If I charge it, can I truly afford the additional monthly payment? Visualize your household budget, and it may help you find the motivation you need.
  • Is this the best time to buy? Should I wait for it to go on sale, or even wait for a better sale?
  • Can I find this at a better price somewhere else? (Sometimes, just the act of driving to another store will be enough “cooling off” to help you realize you don’t need it.)

Impulse purchases are going to happen. But if you use these strategies to keep them under control, you can prevent “gotta have it” from wrecking your household budget and keep moving toward your long-term financial goals.

Should you find you still can’t keep the “wants” in check, the professionals at Credit Counselors, a non-profit credit counseling service, can help you put together a debt management plan and show you tools to keep your spending under control.