Penny Wise, Pound Foolish?

As I filled my van with gas yesterday and the readout was approaching what I paid for my first car, something occurred to me. Sometimes I am penny wise and pound foolish.

I don’t struggle with the big purchases so much as I do the three dollar and five dollar kind. It’s funny because I meticulously monitor our thermostat to make sure that we don’t spend a dime extra on heat or cooling. I make sure that the only lights on in our home are the ones in use. I make sure that the car does not idle too much and I buy every Powerbar on clearance. Yet I can blow all of these frugal strategies with one or two trips to Starbucks or by throwing that Five Hour Energy into my cart in the check out line.

Maybe there’s not much to be done about paying at the pump (short of going hybrid/electric), but many of us make big purchases that can destroy months of frugality with our small purchases. Think about the big purchases you make in life. It could be a once a year splurge or a monthly buy that you don’t think twice about. Ask yourself, “what motivated me to buy this?”. Was it to make yourself feel better (retail therapy) or something you got to fit in with a certain group or class of people? Were you duped by advertising?

Analyze

Analyzing the motivations behind your expenditures will alleviate a lot of unnecessary spending.

Exercise Control

Once you identify the triggers that make you spend big, pay attention to them and control your urges.

Trim the Fat

Go over your budget and check for items you are being pound foolish with and see if there’s a way to reduce or eliminate them.

Think it over

The next time you are tempted to make a big impulse purchase, leave the store and give yourself some time to think about it.

Are you penny wise or pound foolish or wise or foolish on both counts? Let us know by commenting below (hey that rhymed).

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