You Gotta Know When to Hold ‘Em

25 03 2011

At some point we’ve all heard Kenny Rogers’ song “The Gambler”.  There are many rules with poker and if you’re going to play, you must know the rules.  You “gotta know when to hold ’em, know when to fold ’em and know when to walk away”.  I find the title fitting because when we spend money we don’t have, we are gambling on our financial well-being. 

Unfortunately, we live in a society surrounded by instant gratification.  With the quick swipe of a credit card we can purchase anything our heart desires (up to a specific amount – otherwise known as your credit limit).  But I say forego instant gratification!  Channel Rogers’ song and be aware of when you need to hold your money and know when to walk away from a purchase.

A great experiment would be: 

  • Leave the credit cards at home.  When the credit is gone, it’s gone.  You cannot shop with credit you do not have.
  • Window Shop.  Browse items you would like to buy.  See how long it would take you to purchase them with cash.  You might end up deciding the item is not worth the wait, leaving you with money in the bank.
  • Imagine the Other Possibilities.  What would life be like if you didn’t buy that new living room set?  Would you have chosen to invest the money in an IRA?  Maybe that living room set would turn into a weekend getaway with your spouse?
  • Practice Discipline.  What better way to improve your self-esteem and finances than to know when to hold ’em, especially if you have failed at budgeting prior.  Know when to walk away from a purchase and feel good about your decision.
  • Lead by Example.  Our children take note of all we do.  This would be a great time to turn your finances around and teach your children how to save for something rather than use credit and pay for it over time (with interest).

Walking away from making a purchase can truly change your life financially.  Compound the frequency of not purchasing and you would be amazed at your accumulation of wealth!  So the next time you’re debating whether to purchase something, sing Kenny’s song.  Your decision to not buy might just surprise you!

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