Wednesday, July 16, 2014

Making A Major Purchase...

...and other thoughts about the spending of money.

There are lots of very good things written about financial prudence -- emergency funds, college funds, retirement accounts, mortgages, and various types of debt. And it is quite important, to my mind, to have financial prudence -- to live within your means and save a bit. My dad always taught us that you should save something from every paycheck, and this is excellent advice, as it accomplishes more than just ensuring that you build a savings account for emergencies and future needs. Saving a little bit from each paycheck helps you to control your spending, to think more about where your money is going, as you are not permitting yourself to spend everything you make (or more than what you make). Spending something less than you earn and saving the rest helps you to establish good financial habits for the long run. Living below your means and accumulating savings also provides for those times when you must make a major purchase. And those times do come.

And that's what I'm going to talk about today -- those times when you do need to make a major purchase. I'm not going to speak about major repair costs today -- as when something breaks and needs to be fixed on your car or in your house. What I'm going to address are those times when you need to buy something new or "new to you" -- such as a car or a washer/dryer or a refrigerator/freezer or a dishwasher or a new suit and shoes for a job interview or a cell phone or a computer or a TV. And -- let's not kid ourselves -- most people these days consider a cell phone and a computer and a TV to be "necessities." 

I am not, however, going to speak about finding good deals and making wise choices about affordable brands. I am not going to address the decision about whether or not you actually need to buy any of these things. I am going to assume that you have saved the money to make a purchase without using credit. Except -- perhaps -- for the car purchase. People oftentimes take out car loans in a very responsible manner. I am going to assume that you have been prudent in your budgeting and in your decision to actually go ahead with a purchase.

What am I going to speak about then? I am going to give some thought to the ATTITUDE with which you make your purchase. And I'm talking mostly to those people who really are quite frugal and agonize about spending money, even if they really have plenty of the green stuff. Yes, there are -- indeed -- those people among us. And it is to them that I am talking today.

The right attitude about making a big purchase -- which, necessarily, involves plopping down a good deal of $$$ -- is something I also learned from my dad. My dad never made a lot of money. We never had a lot of money. But, he had a very healthy attitude about money. He used to say, "If you can fix it with money, it's not a problem." And when something expensive needed to be purchased, he made it into a fun time. Yes -- a fun time. For example, if shopping needed to be done for a car or a carpet or a new dishwasher, there would be a rather celebratory atmosphere surrounding the whole thing. He didn't mope and drag himself down to the store and resentfully plop down the cash and come immediately home with a resigned, yet depressed, attitude. What did he do? He often included the whole family (or at least my mother) in the purchase. He would wake up in an excited mood, talking about the thing we were going to buy. We might all pile into the car and head to the store, all three of us kids providing our "helpful input" during the selection and purchase process. My dad allowed this because he was Italian (and Italians are quite forbearing of children) and he thought it would make us smart. (I bet we enamored ourselves to a lot of salespeople. Ha!) After the purchase was made, we might go to lunch or to get an ice cream cone or stop at the market to buy something special for supper. And then we would all gather around the newly purchased item at home, admiring it and talking about how much fun we were going to have with it or how useful it was going to be. It was always a grand time, with my dad never, ever letting on that buying this thing was any type of financial strain. Even though I know it was. I knew it at the time, too, because my parents were always quite open about our financial situation. Because they thought it would make us smart. My mom and dad often made things inconvenient for themselves by including us kids, because they thought it was an important part of our education.

These days, most people are financially stressed. In my opinion, a lot of this stress could be relieved by appropriate public policy. Unfortunately, that is probably not going to happen any time soon. So, what do we do in the meantime? Wring our hands and fret? That's a waste of this wonderful gift called life. So, what I do is look to my dad, who really didn't have an easy time of it during the turbulent 60's and 70's. Did things get to him? Yes, they did. But, I always saw that -- when the rubber hit the road and money needed to be spent -- he made the decision to turn the proverbial lemons into the proverbial lemonade. And he also had this attitude when deciding to make a purchase here and there that wasn't exactly a "necessity" -- such as the color TV he bought when I was in the 7th grade or the dinner at the nice restaurant for the out-of-town relatives. When he made the choice to make a significant purchase, he did consider it carefully. He was prudent. But, when he decided to go ahead with it, he turned it into a joy and some of the happiest of my childhood memories -- and some of the best preparation for my own adult life. Thanks, Dad. And may you be resting in peace. <3

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