- The Three bs
- Budget Aids
- Two Motivations for Buying
- Buyer's Homework
- Shopping Prices
- Negotiating a Better Deal
- Common Sense Borrowing
- The Bonus "B"
- Big Hat No Cattle
- Ask for Free Stuff!
- The Debt Book
The Three B’s
If you want to clarify what you really need then all you need to do is put together a budget. Errol Flynn said, “My problem lies in reconciling my gross habits with my net income.” A. A. Latimer said, ”Budget: a mathematical confirmation of your suspicions.” And Ronald Reagan said, “We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.” When you work out an honest budget you get to look at what you honestly need. The bottom line is don’t try the next two B’s until you have mastered this one.
Buying is where your money goes. All your buying should obey one master and one master only: Your Budget. The key to good buying is doing your homework and resisting buying for the wrong reasons.
There are two primary motivators for buying. Being aware of them will help you resist spending what you do not require to spend. There are Emotional motivators and Intellectual motivators. Good purchases are ones made intellectually not emotionally.
Emotional buying is also called impulse buying. The danger of an impulse purchase is you rarely consider your budget. Impulse purchasing can also be an attempt to salve a problem in life. “Shopaholic” is now an accepted term in Webster’s Dictionary, defined as a person who shops compulsively. The connotation is the person is trying fill an emptiness in their life.
What are your buying habits? Do you shop intellectually or emotionally? An intellectual shopper takes the time to think about their purchase. More often the intellectual buyer takes the time to do their homework too.
Common Sense on Emotional and Intellectual Buying →
This leads to another important lesson in Buying. A wise buyer shops for the best price and is willing to initiate a negotiation for a better price.
Some say borrowing is the dumbest thing money ever invented. Dave Ramsey jokes, saying, “Debt is dumb. Cash is king.” And while there is a lot of truth to the dangers of borrowing, it would be foolish to think you could throw out credit altogether. It would be impossible.
When you go into a restaurant and sit down and order a meal and pay at the end of your dinner you are using credit. Simple as that. If you are like a majority of cell phone users in the developed world then you pay a monthly bill to your cell service provider—at the end of your month of usage. You are using credit.
Credit and debt are a part of the modern economy. You simply would not be able to function without some form of credit and even borrowing. The problem isn’t borrowing. The problem is how we borrow and why. In this Dave Ramsey couldn’t be more right when he says, “To think that the handling of your personal finances is merely a matter of math control is naive. You must get better control of all aspects of your life. Until you do, [even the best advice] will have little effect but will instead be neutralized by the other habits in your life.”