A few years ago the TV show Saturday Night Live aired a skit called Don’t Buy Stuff. In the skit a couple was trying to grasp the concept of not buying something if they didn’t have the money for it.
It was funny but truthful. Funny because Steve Martin and Amy Poehler are good at what they do—and truthful because so many people don’t understand that they shouldn’t buy things that they don’t have money for.
Plan to Save and Plan to SpendIf we remove those items, including a house and a vehicle, for which most people typically need financing, then the advice in this video is true and can be followed.
Is it easy? Not necessarily. Often it means that we'll need to deny ourselves something we want. In the long run, though, we're all better off if we don't go into debt—especially for frivolous purchases.
In the short term and the long term, your first focus should always be on having enough money to pay for things that you need. That's why it's so important to establish a budget and review it on a regular basis. Take a good look at where your money is really going—and be honest. Don't try to rationalize unplanned (and often costly) purchases by saying, "Well, I had a rough day, so I deserved that [mani-pedi / extra large lattte / expensive dinner]."
Too many "rough days" (or whatever your choice of a rationalization is) can turn into "too much wasted money"—and that can derail your savings plan. So think about things you can do (work out, talk to a good friend) that don't cost money—but that can still help you feel better after a rough day.
"And where would you get this saved money?"
You are in charge of accumulating your own saved money—so remember to pay yourself first so you can build your savings. You and your future are worth it!