Hope for your financial life and beyond

The Un-American Way: Saving for Purchases

Light bulb penniesSeveral weeks ago I wrote about the #1 reason why saving money is important. In “O Lord Jesus, It’s a Fire!” I discussed how saving is vital because we are guaranteed to face emergencies in our life. Having some cash set aside reduces most emergencies to minor inconveniences.

The coolest part about having an emergency fund is that it causes us to emotionally and mentally relax. We realize, with some money reserves in place, that we will be able to move through the crisis with relative ease.  We no longer have to stress out as we scramble to come up with cash or go into debt to fix whatever problem has come about.

I’ve believed my whole life saving money was important, especially for a “rainy day.” But in my saving money belief structure, I was missing a vital element. To incorporate this missing link it into my life, I would have to do something very un-American. I would have to come face to face with what I really didn’t want to do…

I would have to learn to save for purchases.

In general, the American culture does not teach saving for purchases. We believe in having it now and paying for it later. Carry a few plastic cards in your wallet and any desire can be instantaneously gratified. That’s the mantra.

That’s pretty much where I was for most of my adult life. And it served me fairly well, except for the fact that I was overspending. My wife and I felt like we were being responsible in that we always paid our credit cards off at the end of each month. Truth is, we were not being responsible enough in that we weren’t setting definite limits (in our budget) and were “pleasure spending” all too often.

Another issue we faced because of our irresponsibility is that we were always having “gotcha” moments. You know…the cash flow is going well for the month and then…boom! A big bill would come in the mail that we had “forgotten” about. Or the kids had rec league soccer fees. Or the dog needed to go the vet. Or this…or that…or the other thing…the list went on and on. Every month there was at least one abnormal expenditure.

What do you do when moments like that hit? You either charge it or dip into your savings to bail you out. We did both and it frustrated both of us.

The monthly frustration (and some well timed listening to some personal finance podcasts) finally drove us to consider something radical to us at the time. Why not save money in advance for items that we want to purchase or for bills we know will be coming due at certain times during the year. Could we really set aside X amount of dollars each month until we had enough to pay for stuff with cash? Interesting concept.

(Looking back, it seems silly we hadn’t figured this out by that point in our lives. The light bulb had just not clicked on in our mind. And, quite frankly, nobody around us was doing it either…or at least they weren’t talking about it.)

So we tossed out what paltry spending plan we had and began to change the way we thought about saving. It wasn’t easy. Years of faulty thinking had to be rewired. But I believe that decision marked when we started to get serious about our personal finances. We were doing something different…something our culture doesn’t believe in.

Tomorrow I will lay out the details and structure about how we did (and still do) this. Until then…

Do you think I am being too hard on our culture when I say it’s un-American to save for purchases? Did using credit cards ever cause you to overspend like we did?

Image Credit: FreeDigitalPhotos.net

Next Post: How to Eliminate Overspending and “Gotcha” Moments

Prior Post: For the Love of Money

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  1. I rarely go shopping for “fun”.basically you end up buying something, you didn’t need until you saw it. It’s amazing how much money you save by not shopping.Secondhand stores, garage sales are a bit different, as we are more apt to visit them.The different in price is immense.
    Saving for something is the best way, unless an unbelieveable deal is available now on that product. Then if you decide to buy it with a credit card, pay it off asap, which means going without take out coffees, restaurants, beer etc until it is paid.Otherwise you have just added another bill, and credit interest.

    • Yeh…shopping “just for fun” can be dangerous. I still probably wouldn’t purchase an unbelievable deal unless it fit into my monthly budget. That’s how I got in trouble in the first place.

  2. Saving and paying cash is so worth it. Sadly, most Americans don’t know how to exercise their patience. We want what we want when we want it.

  3. I agree with that. We are a culture of people who don’t like to delay gratification. I still fight my spending urges ALL the time. It’s a work in progress!

    • I know, I do to. I do most of our food shopping so I encounter this a lot at the grocery store. Every time I see the thick, juicy steaks at the meat counter, it’s like little instant gratification goblins are in my ear going, “Eat me, eat me!”

  4. I completely agree with you. It’s funny how much planning we do but then don’t plan for some purchases. In the past, I’ve always taken my car insurance premium and divided by the number of paychecks I received so that I would be prepared for that bill. But then when it came to car maintenance, I never saved in advance. Once I started doing this, my finances became so much easier. After that, I started doing this for other purchases and finances became even easier.

  5. Love this! And it ABSOLUTELY is the American way to “charge it” and possibly worry about it later. We live in a world of instant gratification. I like getting things I want when I want them too, but always expecting that can be dangerous. We get bombarded with images to “buy now, buy now” and with easy access to credit cards, it makes it too easy for us to say, “yes, I will buy now”. It’s a common problem and I’m glad the lightbulb went off for you and your wife. I wish more people would get it. I find great satisfaction and joy in purchasing items that I have saved for and can buy without guilt. I don’t want to be the mom who tells her daughters to lie (TO LIE) to their dad on how I spent my money. I want to buy a pair of shoes and tell my daughters I can’t wait to go home and show their father my new shoes that I saved for and don’t they look great!

    • I have to fight the instant gratification syndrome all the time. A side benefit I have noticed about saving for purchases is that sometimes I begin to save for something I like and then I realize after awhile I don’t really need or want it anymore. So in essence, by delaying a purchase, I save myself money sometimes.

  6. John S @ Frugal Rules says

    Great post Brian! I think you hit the nail on the head. I know it’s not “fun” to save for our purchases, especially in a culture that preaches a buy it now mentality. The thing is though that I have found that I appreciate things more when I save to buy them. I know that I really want it and will get use out of it.

    • I agree in that I appreciate more the things I have saved for. Cool thing is I have seen this begin to spill over into our two oldest kids lives. They have begun to save enough to buy things and I’ve noticed they are beginning to take better care of the things they purchase for themselves.

  7. This is an awesome article. I used to overspend all of the time time with my plastic. Now, I just use it for my everyday purchases that I would normally put on my debit card. I do think I have a long way to go in regards to saving for upcoming large bills or purchases. It is necessary and should be done with everything.

    • Thanks. Overspending is the big danger I encountered with credit cards. Since we cut ours up, our spending has significantly dropped. It very much feels like we have given ourselves a raise.


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