Intentionally spend your money

No, I’m not encouraging you to go out and spend money, but rather to remind you to make a conscious decision when you spend money.

Don’t spend money out of habit, routine, or reflex but rather spend your money on things that provide you true, lasting value or are at least things you actually want!

Intentionally spending money is good because you:

• are less likely to make a bad purchase
• valued the item or service enough to plan your purchase

A silicon cash cow

Have you ever been asked to purchase an extended warranty when buying an appliance, car, or home electronics?

The odds are you have because electronics retailers like Best Buy and Circuit City make significantly more profit on the extended warranties than they do on the electronics themselves.

Now all products involve profit. There is nothing wrong with profit. But extended warranties are thick with profit and offer consumers little to nothing in return.

Ever wonder why they waited until you were at the register to push the extended warranty? Their timing is intentional.

They are hoping you won’t hold up the line while you critically evaluate insuring your purchase.

Many people take the bait, rationalizing that a little extra up front is better than another expensive purchase in a year or two. If people had more time to think it through, they might wonder why they’re buying a new tv or car if they think that it is likely to break down after a couple of years.

Make a habit of intentionally spending money

Unintentional purchases or expenses (unwatched cable channels, unread magazines, etc) add up. They add up especially quickly when sprung in the checkout line (candy anyone)?

How much do you spend on the spur of the moment? How much is lost without realizing it? One financial columnist discovered her consistent, unplanned, and unrecorded purchases cost her $10,000 over the year. So it can happen to any of us if we slip into the habit of spending money unconsciously.

Photo by picsonthefritz