I know how you feel.  You are in the store contemplating whether or not to buy that new 60 inch flat screen or your are at that car lot wondering if you can make the payments.  I know how you feel because I have been there.  If you are trying to talk yourself into it, I have some advice for you…. walk away.

I have one rule of thumb when purchasing large items.  Give yourself time to think about it.  Nothing you buy is that time sensitive and if the salesperson is telling you that it is, then it probably is not a good deal.  The larger the price point the more time I give myself.  Let’s say I was going to buy a new sofa then I would give myself a day or two to think about it.  A new car? I would generally wait a week or more.

Take the element of time out of the equation.  This alone will save you a lot of money on stuff you don’t need.  If you decided, after time, that you need something and are still wondering if you can afford it, you probably can’t.  I pay cash for almost everything.  By “cash”, I mean that I will put it on my credit card of choice, but only if I have the cash to cover it and I plan to pay it off in full the next billing cycle.  I will be writing a lot about how to use credit to your advantage in future posts and how you must be responsible when using it.

If you think that you can afford something because it has six months free financing then walk away.  That is living pay check to paycheck.  If you want to buy a car because they are offering 0 percent financing guard yourself against a job loss and pay cash for a ride you can afford now.  Most things are not that urgent and give yourself time to decide if you can really afford it.  This method has allowed me to save money, get out of debt and invest the money.  I am at the point where I can afford to pay cash for a new car and you can get there too!