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, 2009 |
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Living a Better Life Short-Term Planning Can Lead to a Life of Long-Term Mistakes
At some point in
life, everyone makes mistakes—whether financial or otherwise.
But the quicker we learn from those mistakes the better!
And one of the biggest financial mistakes I believe people make (and,
yes, some will make more than others--but often because they have not been
taught enough about how finances work), is in thinking short-term instead of
long-term. And I’m not even
talking about saving and investing; I’m talking about budgeting and spending!
More...
Basically, short-term planning can get you what you want or what you need, now. Whereas long-term planning, usually gets you a much better price for what you want or what you need, but you’ll have to wait for it. Haven’t you heard the news? What a great deal! You can get $1,000.00 cash back, TODAY! That does sound great doesn’t it… and all you have to do is make a commitment to pay $350.00 a month for 5 years, for the new car that comes with it! (Even though you can’t really afford that $350.00 a month, you really could use that $1,000.00 cash today, so let’s go sign up! NOT!!!) Or, you can instantly trade your next paycheck for some cash this week, just minus a hefty transaction fee! The list goes on and on, we choose between short- and long-term planning on a daily basis and many of these decisions will either cost us money, or save money. Take for example, eating out... the short-term benefit is that we get our food fast and easy, but the long-term result is that we could have saved a lot of money by fixing dinner at home… or, maybe something even simpler than that; picking up single issues of your favorite magazine at the grocery store every month. The short-term benefit is you can take that magazine home and read it right now, but the long-term result is you could have practically paid for a year’s subscription had you taken a few minutes to fill the card in (from the last issue you picked up) and then patiently waited for the next issue to arrive. Thankfully, these are just minor short-term planning mistakes. Cashing in on that $1,000 “Deal of the Month” offer, however, is another matter! Mistakes like that can take years to make up. And they can even create a snowballing effect, where one short-term mistake leads to another, and another, and another, creating years of financial strife. Now, please don’t misunderstand me, I do know firsthand that there are times when short-term budgeting and spending is a priority and you may not have a choice to wait for long-term options. But, eventually, at some point, the tide will change and you WILL have a choice. And it’s at that point that you must switch gears and break out of short-term planning so that you will ultimately be able to save more money. It may take a while for those savings to materialize, but trust me, they will!
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Copyright © 2006 by Michelle Jones, author of Dealing with Debt and Frugal Family Recipes. All rights reserved. Want more money-saving tips? Get a FREE Subscription to our monthly newsletter!
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