Set a budget: The difference between what you can afford and what you

Set a budget: The difference between what you can afford and what you -

Do you head to a purchase with a budget, but end up spending much more than this amount?

This is a theory ...

The difference between what you can afford and what you want can be measured by how marketing works on your aspirations.

If the ambitious marketing works well on you (read: Real Housewives, Dom Perignon and other symbols of conspicuous consumption) there will always be a significant gap between what you can afford and what you want or desire

But. if the ambitious marketing is hardly bat an eyelash you, there is almost never a gap between what you want and what you can afford.

It is easy to get caught in this gap, however. And if you do, you might end up swimming in debt payments or way past your comfort zone

Here are some big gaps to avoid :.

Know your comfort zone and stick to a budget

Have you ever wanted to buy a car and you say, yes, I will spend a reasonable $ 3,000 on a used Ford Escort?

then you will find a walk and watch the cars where the cost of banks increasingly top of your comfort zone until you have a copy of Car and Driver magazine in your hands and you are actually considering buying a $ 72,000 Porsche Cayenne instead.

Does this sound familiar? Maybe not to that extreme, but it happens to the best of us.

It is easy to get caught up in wanting something out of your price range.

It's fun to fantasize and imagine the smooth leather wrapped around the steering wheel or walnut trim accenting your outfit.

If you decide to give your requirements, what is the cost of your financial future?

If you buy a car which is $ 20,000 more than expected, you may be able to finance and it just has a few hundred dollars more each month.

This is OK right? But what about a house?

In real estate, there may be a difference of $ 150,000.

Of course, you can get a mortgage if you qualify, but you are now looking at an extra $ 720 in monthly payments. So with the new car and the house you now see nearly a thousand dollars in monthly payments you do not plan originally.

What does an extra thousand dollars to you?

If you do not have to make payments, you could:

• Investing an additional $ 1,000 a month
• Organize a fun and relaxed family event : make a taco truck at home or have a barbecue impressive for $ 300, and put the rest into savings.
• Take $ 500 per month and put it to a charity or a different cause, and invest another $ 500
• Buy a new pair of designer shoes or a bag hand each month

instead of giving your needs, focus on setting a budget and live a little below your needs to create some cash flow.

1000

cash flow $ per month creates all sorts of new opportunities for you

by shopping, go in with a budget

photo credit:.? SeeMidTN.com (aka Brent) via photopin cc

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