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Tuesday, 27 May 2014

Understanding key to saving more money


  Filed under: Personal Finance |
Saving more money, is a goal we should all have. Sometimes, it is quite difficult to ignore our desire to want that new thing. We can all relate. Whether it is that golf club, new pair of shoes, or the TV, they all seem to reach out to us and say “You know you cannot live without me… Bring me home today.”
 Once in a while, we can temporary talk us out of the wish but let’s just say that we just cannot do it this time. We have decided that the new product is exactly what we need and we won’t be denied until we get one. Then what?
 At this point, all is not lost. We just have to understand and appreciate our impulses and desires and still try to maximise our savings.
Take my desire to always want that cup of Starbucks coffee. There are many times this comes up and I would feel the burning desire to drive to the nearest coffee shop.
In the old days, I would get a grande (medium) sized coffee, but I have come to realise that all I really need is a tall (small) cup because all it takes is the first 25 ml of liquid to calm my nerves.
I learned to stop thinking about whether a medium or small cup is a better value because what’s the most important is how much I end up saving and ultimately keep in my pocket. I understand my desire (to want coffee), the product (Starbucks coffee size differences), and the solution just followed.
The key to saving more money
 Here’s another example, my future purchase of a flat screen TV. I don’t own one right now, but I want one every time I go to Costco. I did some research over the past few months, and I know that the ones with 1080p are more expensive because it’s provides the best picture quality in the market today.
For many of us, we want a flat screen TV because it is cool, not because it’s got 1080p. If we understand what it is that makes us happy and calm our impulses, then we won’t waste our money on the high end model that may cost $2,199 but instead get the lower end model that might be $1,399. Most people will be just as happy with purchasing either, but the ones that take the time to understand their desire would have saved an extra $800.
These are just two examples, but this actually applies to almost everything we purchase because there are always comparable products at different price ranges. The key is to understand our need and want, understand the product so we can make informed decisions, and the solution will soon follow

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