by Kim Remesch

Created on: July 05, 2010

Every cent you DON’T spend is money you have to spend another day. More than that, because you save the money you don’t spend at the convenience store, fast food joint, etc., you can SAVE money, compound it and have even more to buy something you really want later on.

Many of us nowadays fall into the category of robbing Peter to pay Paul. We put things on credit cards to do the things we want to do NOW. And that’s where it all starts to go wrong. You spend $10 on something on a credit card on just one item, and we all know you are spending $10 on many items in a month. Then you are charged 20 percent for the privilege of having the item now. Is it worth it? Most people don’t connect the dots. That’s a lot of money you could be saving just by putting off spending small bits.

If you put off that purchase and save that money, you not only SAVE the amount of the purchase, but you save on interest that is charged on the borrowed money AND you save interest you earn on money you put in the bank or into another investment. It’s a snowball effect.

Oprah Winfrey, voted time and time again as the most influential woman in America, has rules on how she spends her money, particularly regarding credit cards. A lightbulb should be going off in your head right now. This is a woman who can walk into any store and buy anything she wants, and yet she has rules on how she spends money on credit. Given her financial state, she’s a good role model to follow. Her caveat regarding credit cards is to never charge a meal on a credit card. The idea is that by the time the bill comes around, you have nothing to show for it. You use it, and it’s gone, but you’re left with a bill you’ll be charged 20 percent interest on. Conversely, she says, if you have to pull out cold, hard cash to pay for food, you will be very mindful of the amount of that burger. Eliminate that, and you eliminate the finance charge, so you’ll have money to save.

Money is all about either/or propositions. If you buy “x,” you can’t afford “y” a month from now. If you saved those initial months (didn’t buy a coffee from the drive in each morning, didn’t get the candy bar from the convenience store to get you through the afternoon, etc.), you’d have enough to buy a CD at the end of the month. Keep that trend going, and maybe in a year you can buy the TV you’ve been wanting but always seemed beyond

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