Today I’d like to talk about the fun part that comes with having your finances in check: guilt-free spending.
I’ve shared some stories of my own and my client’s experiences of saving up for a holiday upfront instead of paying it all with a credit card. The latter usually results in being stressed about having to pay everything back afterward. That’s really the opposite of why you go on holiday, right?
Many of us, I included, have a plan in place to save up for a big-ticket item. It could be your holidays, your car, or hobbies. There is a difference in the feeling associated with a big purchase if you pay it with your savings or your credit card. Paying it with your savings, your hard-earned money, you’ll value the purchase much more. If we pay something with the credit card, we tend to think that it’s not really our money and hence appreciate something less.
One of my experiences was to be able to pay for a car with cash instead of using a personal loan. It was such a better feeling, and it also meant that I didn’t have a loan attached when I started borrowing money for other things like property.
I observed the same with my hobbies as well. One hobby of mine is music, buying guitars and other musical equipment. When I was able to pay for that with money saved up instead of with credit card, it was a much better feeling.
My question to you: How did it feel like when you’ve saved up for something compared to when you’ve put it on credit?
Let me know in the comments