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It’s a rule that’s been used by people who want to take a stand and get control of their finances for generations now. Every time you’re about to buy something you don’t need or make a big financial decision such as getting a loan, you should spend a night thinking about it and sleep on it. It might seem simple, but it really can save your finances. How? Let’s take a look.
It starts with a budget
This is one of the reasons sleeping on it works best. Because it only really works when you understand how much expendable income you have each week/month/paycheck. Living on a budget isn’t about denying yourself, but rather about finding out how much money you really have and getting a better idea of how much you can spend. Into that budget, you should put a pre-determined list of things you know you’re going to need to buy, so you know when something isn’t on that list, it needs a night to process.
It kills impulse shopping
Flat out denying your impulse by saying “I don’t need this” in the moment isn’t always simple. But it is much easier to simply tell yourself you’re going to give yourself a day to consider it. During that night, it’s much easier to look back and see how such expenses aren’t really worth the money in the first place.
It leads to better decision making
It’s not all about what you spend your money on, either. It’s about the big financial decisions you make. For instance, you should never take the first loan or credit card you get a letter for. As part of the delay you give yourself, you can look at many personal loan providers and see what the market tends to offer on average. You might be able to get a loan that’s a lot more manageable for you or a credit card that even offers better rewards than the first one you saw.
It helps you remember you have sacrifices you might need to make
During that time spent thinking about a purchase, you get a chance to do a couple of things. First, you look at your bank balance to see how much cash you have and then you look at what your planned expenses are on the budget. For much of the month, you’re going to see that you might have to make a sacrifice if you’re going to spend the money anyway. It’s better to be aware of it beforehand rather than coming up short later.
It helps you be mindful
As part of considering those expenses or financial decisions, it’s a good idea to spend the evening talking about them. Regular, meaningful money talks with actionable outcomes do more than help you reach a consensus. They help you explore your own thinking around money and expenses, meaning you become more aware of impulses and habits that you can later lose entirely.
It’s a simple rule, but it changes how you think about finance and it curbs so many of those bad habits that can get you in a bad financial place in the first place. Start sleeping on it and you’ll begin seeing huge changes in your financial health.