My friend told me the other day that she wants to make a big purchase in 4 months time and was wondering out loud if the place would let her make it in payment installments.
I quickly suggested that since she is planning her purchase ahead of time she might as well divide that amount into 4 and put aside that money for the purchase she wishes to make. Not only will she not have to pay interest on payments later but she might even get a reduction in price for buying in cash.
After years of ingrained behaviour it can be very difficult to ‘flip a switch’ and start thinking differently, to not buy things we cannot afford, even if we do actually NEED them (and not just want).
I wonder what our financial behaviour would be like if we didn’t have things like credit cards which give us a false sense of “money in hand”.
And now the secret to successful budgeting – spend less money than you make.