Most if not all personal finance experts endorse saving up for large purchases rather than charging them. Although it may not sound like fun, there are several hidden benefits from doing just that, like the ones listed below.
With the huge amount of credit most people have available these days, instant gratification has become the norm. Hardly anyone has the gumption to wait and save up for the things they want. Even kids are getting “gifts” of toys, clothes, and technology without having earned them or waiting patiently for one of two big gift giving holidays: Christmas and their birthday. What are we teaching these kids and ourselves by giving in to every whim? We are creating a culture where instant gratification is normal and credit card debt is just “part of life”.
By waiting and saving up for large purchases, you will have an increased appreciation when you finally get to purchase the item you want. Doing without things or finding creative solutions while working hard to save up teaches you to truly appreciate your purchases. In past generations, this was the way almost all purchases were made, and in general our ancestors had less clutter and less debt to deal with. As we’ve become a “buy it now” society, we’ve also become a cluttered and debt-ridden society obsessed with instant gratification.
Much like appreciation, taking the time to save up for a purchase makes you evaluate if you truly need the item in question. With instant gratification, we often purchase things we don’t really need and may even regret later on. This is sometimes known as “buyer’s remorse”. Buyer’s remorse is especially likely if you end up making payments on these purchases for months or years to come. You might end up resenting yourself and your purchase if it doesn’t turn out to be something you truly need, use, or like.
Like any skill, saving needs to be practiced in order for you to get proficient at it. By saving up for your larger purchases, you are exercising this muscle and getting practice. This can be helpful when you begin save up for even longer term goals, like buying a house or funding your retirement account. Avoiding impulse purchases and putting money away into savings (and ignoring that it’s there) also takes will power. Saving up for even semi-large purchases helps you build up your will power and money saving skills!
Keeping all these benefits in mind, my husband and I decided we are going to continue with our saving habit. We stash money away for almost all of our large purchases and hardly ever fall victim to impulse purchases or buyer’s remorse. Just recently we had to furnish an entire apartment and we did so by buying affordable furniture. We didn’t charge any of it, and it felt great.
How many of you out there save up for big purchases? Are you glad that you do?- Catherine Alford