Today I did something that many Americans do all the time...I went shopping. I went to an apple store to look at imacs. I spoke with the salesperson, decided which model would be useful and which specifications I should select. I was informed that the particular model had a pricetag of $1800.00. That was where I did something different than many Americans would have done...I walked out of the store without an imac.
This is not to say that at some point in the future that I may walk into that same store and complete the purchase. But instead of pulling out a credit card and making an impulse purchase I decided to think about the purchase and find out what a similiar pc would cost.
And most importantly I had not allocated for and saved the money to pay for that particular purchase. In the event I did buy the computer I would not simply remove the money from my emergency fund. Instead I would budget and save for the purchase.
This experience got me to wonder this: when did it become out of the ordinary to save up the money for something that you want before buying it? In my opinion this is a much superior method to paying for it with a credit card so you can have it now and then paying interest until the computer is so out of date that it is time to get a new one. But the truth is that too few of us save up to pay for our purchases. We allow the lure of instant gratification to break us and we find ourselves in the end with a lot of stuff and no money.
I believe we need to go back to the way our grandparents did it. Pay with cash which in turn forces us to live within our means. The hard truth of doing this means that your friends may have better stuff than you and that you may not be able to live in the same neighborhood as your parents who have been working for 30 years.
What does this have to do with a bankruptcy blog? Everything. Because each day I meet with individuals who are facing bankruptcy...which is a very difficult thing to face indeed. And I am not suggesting that each person I meet with could have avoided bankruptcy through these principals, I do think that if even one of these people could go back in time knowing that these principles would help to avoid bankruptcy that they would do it gladly.
