Stop Future Spending

24 03 2011

Rolist Financial Group believes organization and planning are key elements towards reaching your financial goals.  Planning for future purchases involves organization because you want to research the best prices and find those stores that carry the best deals.  And while we believe you should get the best price for any item or service, there are times when pre-purchasing items too far in advance can have a downside.

Purchasing things too far in advance may hurt your finances.  Often times events get cancelled leaving you stuck with the gift (if you purchased that item too far in advance, your time frame to return the item might have lapsed). 

Another downside to pre-purchasing is the lack of funds in your account for current spending.  If you spent money on items you didn’t need at the moment, it does not leave for extra wiggle room in your budget for expenses that might have just popped up.  Another way to think of it is – trends change, people move away and sizes change.

Also, decide whether keeping that money in your savings or investment account is a wise choice for your situation.  Remember, that money will accumulate interest or capital gains during the time it was not spent!

A good rule to follow would be to purchase gifts during the month they are due.  This way if a party event is cancelled you will have enough time to return the item. 

While there are times that pre-purchasing pays off, you should weigh the pros and cons that relate to your lifestyle.  Decide whether the money is better off in savings to accumulate interest or whether the savings are greater by purchasing the items.




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