Principle #5: Set Your Price Limit… Then Sleep On It

July 26, 2012 § Leave a comment

Isn’t it amazing how some babies can sleep so peacefully. They don’t have a care in the world, because they know that they are in the arms of loving, nurturing parents that won’t let them miss a single feeding or diaper change. They live a life of no burdens and no obligations.

“How great is the love the Father has lavished on us, that we should be called children of God! And that is what we are!” 1 John 3:1 (NIV)

I’d again like to credit Orrin Woodward‘s book, Resolved: 13 Resolutions for LIFE, as it is in his eighth chapter that he addresses the resolve to improve one’s finances. It is by following his financial principles that my wife an I were able to dig ourselves out of debt.

This fifth principle is another one that does not require much sacrifice, yet has the power to completely change a person’s finances.

“When a person desires financial freedom more than he desires things, then he will get his freedom by allowing many things to remain un-purchased.” –Orrin Woodward

The Impulse Buy

Impulsive, impatient purchases are debt’s best friend.” -Dave Ramsey

Impulse buying will blow your budget out of the water. It will sink your battleship. I know that this sale is today only… I know that this is the only red one they have… I know that without this you, your spouse, or your kids will never be able to be seen in public again… But you have to think of this as a law:

Set Your Price Limit and Then Sleep On It!

Chris Brady and Orrin Woodward describe two types of people who struggle with impulse buys:

  1. Some people will penny pinch all year long, reusing paper lunch sacks, turning their underwear inside out, and shifting their car in neutral every time they hit a downhill slope. This same person will come home one day with a new motorcycle, boat, $400 golf club, iPad, infomercial juicer, or a bangin’ new designer handbag.
  2. The second person does not make any large purchases, but instead nickel and dimes themselves into oblivion. They get their hair cut and highlighted, nails done, Starbucks anyone (?), candy bars, girl-scout cookies, valet parking, or eat-out for lunch and dinner several days per week. I could go on, but I’ll spare you.

There is nothing wrong with an occasional large purchase (if it has been calculated, budgeted, and can be paid in cash) or with an occasional small purchase, but there is a better way of managing your money.

Orrin Woodward earns millions of dollars per year and claims that he and his wife Laurie have a set price of $500. If either of them find an item they’d like to purchase that is more than $500, they follow their self-imposed rule, and go home to think, pray, and sleep on it.

Now, if their income is so high, yet their set price is only $500, do you think it might be a good idea to set your price limit a little lower? I would suggest $50 or $100 to start.

In addition to just setting this limit, you should budget that amount into your monthly budget — meaning that you can only make that sort of purchase once a month. Just because an item is less than your impulse buy limit, does not mean that you should buy it.

#QuickNote

I apologize for having taken a short break from blogging without notice. A very close friend of mine died in a motorcycle accident, leaving behind a young pregnant wife. Please keep her in your prayers, and if you’d like to contribute to supporting this widow, please contact me, and I’ll give you instructions.

As always, I appreciate your comments and suggestions, so please feel free to comment below.

Keep Reading and Leading!


David J. Garza

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