Sharing Daily Discoveries About Personal Finance And Business Topics

Saving Just To Spend It Right Away

Today I heard about a person who saved almost ten thousand dollars when it came to a purchase of a new home which is pretty substantial. Apparently his first reaction was that since he unexpectedly saved all this money he will simply take a lot of vacations during the year.

I personally treat funds like these as the savings account funds as I expected to use it originally. Therefore, I try not to spend as if I don’t have it. That is until I find something good to invest it in. I think just spending the money because you were expecting to use it anyways is a bit premature.

It just reminds me of a situation like if you say went to the store to buy a $10 tool that is on sale for $8. You then spend the $2 on say candy because you weren’t expecting to have change left over anyways. To me it just seems like a habit that can save and earn you a lot more during the year if you aren’t inclined to spend these types of unexpected funds that you saved.

2 Comments to Saving Just To Spend It Right Away

  • I suspect the chap who said he will take more vacations probably won’t. I agree with your financial analysis but will say that I do believe there is value in the psychology of unexpected money.

    It’s a bit like the grocery store add where by using a loyalty card a person saved a loonie. A loonie more than her friend. Arguably the knowledge she saved a loonie and the nice warm feeling she felt was far more valuable than the loonie itself.

    Stewart 9/7/2010 7:08 pm
  • Interesting way of looking at it that is true in many ways. 🙂

    Alan Yu 9/7/2010 10:29 pm

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