Thanks for voting!Remember the days of make believe? You could entertain yourself for hours just by using your own imagination. Cops and robbers. Super heroes. House. All fun and fond memories. Guess what? We think as an adult you could stand to benefit financially from a little pretending, too. It’s time to dust off the old imagination.
Whether it’s buying a house or another big purchase, pretending can actually be a strategic way to prepare yourself for the potentially harsh reality. We’re big into preparation, especially when it comes to saving. So let’s pretend you have a big chunk of savings tucked away for a cool 25% down on a sweet little Cape Cod you’ve been coveting. Kudos for the forward thinking (and the squirreling). But let’s take a further look. Once that down payment fund is depleted, do you have enough for the extras that come with homeownership? Here’s where you have to use a little imagination.
This Blog suggests putting together a realistic budget on paper. Start budgeting based on the idea that you’ve purchased the house (or car or boat) that you’ve been saving up for. Deposit the difference of your monthly expenses into your savings. It’s a true test of how you’ll fare in the real world, financially speaking. You may find you can’t swing the potential difference. Imagine. But with a little adjustment, today’s make believe will become tomorrow’s happily ever after.
Tags: Budget, Down-Payment, Homeownership
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Budget really makes wonders in our life. This pretend play works in any big purchase or even addition to your family. I used the same logic when we had our first baby 4 years ago. I started putting away $250 every month as soon as my wife got pregnant. I know some call its heights of planning but I call it forward looking. I adjusted my budget accordingly and after the birth, I didn’t see a big change to spend that $250 every month for diapers and milk. I invested the saved up bulk of money for my son’s education. It satisifed two purposes. One to get used to future expense and second investing for education. I guess forward looking by pretending does work in a great way.
Do check out my blog at moneyreallymatters.com for more thougths and views.
It is amazing how delay gratification can help you to save money and co payments in doctors visits. As a single mother the pressure is high to met everyone needs and using food as an emotional escape is more common than we want to accept. After I confront myself and make a decision that I was not going to feed any negative emotions with food I was able to loose weight and save over 100 dollars a month. Do I get things that satisfy my palate? Yes I do but not everyday or every week and I only get it if the article fit on my budget. In other words I don’t alterate my budget to accomodate a frugal gastronomic desire.
I think that fear can be a great motivator as well; for example, the prospects of spending your retirement years as a Walmart greeter can be a motivating tool to use to make wise financial decisions.
This works great. This can be used for anything but I like the idea of using it for a car purchase. If you want a shiny new $50,000 sports car try putting away the $900 or so a month it will cost you for a year. At the end of the year you’ll know if you can afford it and you can use the $11,000 you put away as a down payment (saving you quite a bit in interest charges). Better yet, you might realize how much money that car will really cost you and maybe you’ll buy a nice used car instead? Either way, it’s a win-win situaton.