In the day and age we live in where everything is instant and
right at our fingertips with technology.
We can be impulsive and make wrong choices or choices that are not in
the right time. Have you heard the
statements my eyes were bigger than my stomach.
Using the six month rule will ensure that your purchases are more deliberate
and less impulsive. Many times if you
will wait six months before you make a large purchase, something better will
come on the market, or you’ll realize it’s not exactly what you want or need at
the time.
The six month rule has you save for six months the difference
in payments when you want to make a larger purchase or upgrade. For example, when you want to move from
renting an apartment to renting a house or when you want to make an automobile
purchase.
If you currently rent an apartment and your rent payment is
$1,000 a month and you plan on moving to a house where the rent will be $1,500
a month. For six months you should make
a $500 payment to yourself into a savings account.
You want to do this for two reasons, first to prove to
yourself and your budget that you can actually afford that additional $500 each
month. Placing it in a savings account
and not once touching it, or withdrawing from it will show you that you can
actually afford that increase in payment without it affecting your lifestyle.
Reason number two is after six months saving $500 each month
you will have $3,000 saved, which you can use towards your deposit on your new
place. You can also use some of that
money to purchase furniture or appliances you may need. Going from an apartment to a larger house,
you usually have a second living room you may need to furnish. Many homes don’t come with a refrigerator or
washing machine and dryer. These are
additional expenses that you need to think of when upgrading.
The same principle works for upgrading your family vehicle or
purchasing that boat you’ve had your eye on.
If you save for six months it establishes that you can afford the
payment. It also helps you have a down
payment or a large chunk of money to place on the principal as soon as you make
your purchase. When you wait the six
months you have time to take into consideration, is your insurance going to
stay the same or increase. Does the
vehicle you are going to purchase get better or worse miles per gallon of
gasoline.
Other benefits in waiting six months is it gives you time to
research and shop around to ensure you are getting the best price for what
you are purchasing. It gives you time to
discuss with your spouse and family the decision you are about to make and
consider how it affects everyone in the family.
My husband and I utilized the six month rule when we moved
from our first apartment to our first house and we are so grateful someone
shared this great wisdom with us. We
were able to properly prepare for our move; we had the money for our deposit
and also money to purchase the additional appliances and furniture for the
house. We were confident that we could
afford the increase in rent each month.
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We have also utilized the six month rule in our vehicle
purchases and again, it gave us time to shop around and pick out exactly what
we wanted and would work for our family.
We were both on the same page on the amount we wanted to spend, so we
were able to stand our ground and not be pressured by the sales people. We had already waited six months, so when the
salesman did not want to agree to our terms we were willing to walk away and
guess what we got everything we wanted.
When your purchases are impulsive you sometimes fall under the pressure
you feel from the sales person and get something you didn’t even want to begin
with.
I highly recommend making the six month rule part of your
life when desiring to make a larger purchase.
You will benefit greatly not only in your financial planning but also in
your relationships. Having time to
discuss a larger purchase with your spouse and family fosters unity in your
home, gives you time to consider the pros and cons to making your purchase and
ensures less of those impulse purchases.
There is another variation of the six month rule that I will
blog about next week.
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