Category: Finance, Personal Finance.
I love the series Desperate Housewives. As a result, I had to borrow the DVDs of the earlier episodes, so you will forgive me if my examples may seem a little dated.
Unfortunately, I only discovered it when it was well into its third season. Most people have putting aside money for retirement as one of their financial goals. We can obtain that extra money in a few different ways. That requires having a sum of money with which to invest, to provide us, and hopefully grow with an income when we choose to stop working, or no longer can work. Apart from getting a huge inheritance or winning the lottery, it boils down to either generating more money, or spending less. So we' re now talking about spending less. Not everyone has the inclination to start a business, take on a second job, or haggle with your boss for a raise.
In order to start saving, you need to start examining some of your spending habits. Why do people tend to spend? If you are already a good saver, you don' t actually need to read this article. One of the differences I noticed when I was watching the first season of Desperate Housewives on DVD, instead of the TV, was that each episode was not that long. Advertisements telling me what I should buy, where I should go, what kind of lifestyle I should have, who I should be become. A good half of the air- time on TV was taken up by advertisements.
All targeted at getting me to spend my money. That's how society works. You notice we' re referred to as" consumers" . It is how the economy continues to grow- by getting people to spend their hard- earned money on things they don' t necessarily need. Gabrielle is a pretty but poor girl who made good as a model. There's a character in this series called Gabrielle.
She gives this all up to marry rich man Carlos and together, they move into blissful suburbia on Wisteria Lane. Carlos is a busy man. Here, they live in a huge house, have fast cars, have a maid and Gabrielle has all the clothes and jewellery she loves so much. He has to earn money to support their lifestyle, so he shows his love for her by buying her more gifts, more cars and more jewellery. She is driven into the arms of her penniless teenage gardener. But the beautiful Gabrielle is unhappy and lonely.
I won' t try to derive too many lessons from this. But clearly, money does not buy happiness. It's not a story on personal finance. The fast cars, nice clothes and, big house jewellery don' t guarantee happiness. You don' t need those things to be happy. You don' t have to believe what the advertisements want you to believe. There is no need to spend more than you can afford trying to keep up with or impress your friends.
It's all too easy to forget your financial goals when you are sitting in a brand new car, smelling the new leather, and thinking how nice it would be to own this car. Certainly, one shouldn' t be spending just to feel good, like Gabrielle does. Be careful when the salesman tells you it will only cost you$ 300 a month. And that doesn' t include the cost of petrol, maintenance and repairs. What he doesn' t tell you is it will cost you$ 300 a month for many many months. Analyse your spending. You don' t have to go into the minute details.
Take time to track your receipts, your credit card bills, and your cheques. But you do need to know where your money is going. There's good debt- like buying real estate, or funding an education. Be careful with debt. And there's bad debt- new living room furniture, a new car, new clothes, that vacation you can' t quite afford. Pay off your debts as soon as you can, especially the high- interest ones.
The truth is, that vacation you took for a few weeks as a break from your horrible boss may have seriously affected your financial goals, causing you to work for a few more years for that same boss! It is a lot harder to find a low- risk investment that will generate you as much gains as the interest you are paying on your credit card. Reduce your spending. Think of it as a low- risk way of gaining money on the money you don' t pay in interest to the credit card company. If we accept that Gabrielle and Carlos are reasonably true to life, you can see it is not true that having an expensive lifestyle will guarantee happiness. But it helps to learn to spend money wisely rather than carelessly.
There's no need to be a penny- pinching stay- at- home miser. Live within your means. Spending too much is a relative problem- it is relative to how much YOU earn. You don' t need to buy what your neighbour is buying. Look out for the best values. And don' t waste your money on brand names. High price does not equal good quality.
The only thing you are paying for is what it cost the company to advertise that product. Life doesn' t have to be one long drag just because you can' t spend money. Be creative! Some of the best things in life are free. Don' t smoke. Oh, and finally, don' t pick up any costly habits. If you don' t think about the cost of the cigarette, think about your medical bills ten years from now.
And don' t gamble. Don' t drink alcohol. It's the casinos who are rich. The house always wins. Not the gamblers inside. Juanita, Carlos' mother learnt that the hard way. My lessons on spending after watching Desperate Housewives!
So that's it!
