My wife and I have been saving up for a new-to-us automobile.
Instead of financing the purchase of a newer car, we have been making monthly payments to ourselves.
Each month I initiate a transfer from my local checking account to my online savings account. (ING Direct makes these transfers super-simple to set up.)
The amount transferred is equal to the estimated cost of the vehicle, divided by the number of months until the purchase will be made.
This approach works for any major purchase – and helps to keep us out of consumer debt.
Obviously, we all know that we should save. However, most folks never get to the point where they do save. We look around and see all of the stuff that we want – and we borrow to get it. We are then stuck with monthly payments and interest charges.
My own debt addiction left me miserable and broke. I had a mailbox-full of bills and a life-full of stuff that I didn’t really need.
Thankfully, my eyes were opened. I was able to see how dangerous my borrowing habits had become. I broke the cycle – and I never want to go back to it. Instead, I save for future purchases. I focus on what I already own – and work hard to save for things that I actually want and need.
Today is not the day to bury our heads in the sand and ignore our financial situation. Instead, today is the day to take charge – to look ourselves in the eye – and do something.