I will reluctantly admit that I like new, shiny things.  They can shine, have the “new” smell, and sometimes if you are lucky, they can sparkle.  Who does not like anything that sparkles?  And what about what is happening on the other side of the fence, did your neighbor just one-up you and get something new?

In this materialistic society that we live in, which some people will call the “Throw Away” society, it is easy to get caught up in the latest, greatest, new thing that you must simply just have, no matter what the cost.  But it is worth it?  Do you really need that new car, when the one you drive is perfectly fine and gets you from A to B safely?  Or do you need that fancy boat that is close to the same price as a condominium, or can you live with the other boat that floats just the same?  Or in my case, do I need that other pair of boots that look almost the same as the ones I already own?

You can purchase just about anything and not have to worry if you can afford it or not; you just have to finance it (ok, maybe not those boots, but we are talking about the bigger ticket items).  But have you ever stopped to ask what the financing is going to cost you?  Is that gigantic television, which you can not afford by the way, worth the monthly payments?  Did you find out just how much that TV is going to cost you at the end of the term?  What about that new car? Spoiler alert: the final cost will be way more than you think.  Better we stop talking about what else you can finance now or this blog will be thousands of pages long!

In our world at Karve Solutions, we see numbers day in and day out.  We see what debt can do to a person or business who gets themselves into financial peril, and unfortunately in most cases, that peril could have been avoided.  It is one of the downfalls of being in this area of business…I can’t go and buy something without thinking these two thoughts:

1. Do I really need it?

2. Is it in my budget? 

Let us face it, it is easy to get into the buying mode.  It is easy to convince yourself, that yes, I do need it, I deserve to make that purchase.  Often, we do not stop to consider this simple question: Can I afford it?  This is a question that I ask myself quite often, especially if I walk by that shoe store (yes, I have a bit of a shoe fetish) or by the jewelry store (I did say I like things that sparkle).  We are living in a society that defines your financial world by asking how much of a monthly payment you can afford.  Never mind what the total cost is, at least you can afford the monthly payment.  Am I right?

I tell everyone that you must have a budget. Yes, I used THAT word, budget.  A dreaded word to some but such an important word that should be part of your vocabulary.  How many of you have taken the time to go through your monthly income and expenses to find out just how much you have left at the end of the month?  My guess, not too many of you, because it an arduous, stressful and sometimes boring task.  It takes time and effort, and in some cases, can be a real eye-opener that you may not want.  As much as you may dread it, it is a very important step to take towards your financial health. Without knowing what your monthly household income is versus your monthly household expenses, you will not be able to make good, sound decisions when your eye catches that new, shiny item.  Check out the Karve Solutions budget sheet here, to help you get started or check out some other options online.

Ultimately, the decisions you make today are going to affect what happens tomorrow and the next day.  So, try not to get caught up in the buying trend and turn a blind eye to that new, shiny item that showed up in your neighbor’s yard.  Remember, if you catch yourself saying the phrase “but it only costs me $X per month”, stop yourself right there and take a good look at your budget once again and figure out what that item is really going to cost you at the end of the financing term.  Better yet, ask the seller what the total cost will be.  Bottom line, if you need to break it down to a low monthly payment to make it work, then walk away if you really do not need it and save yourself a ton of hidden fees and interest costs.  Stick to your budget and save your money for when you can really afford it.

In case you missed it, here is Karve Solutions Budget Sheet

July 16th, 2021