The Magic of Saving Up to Buy Things

There is a popular SNL skit that made the rounds not too long ago. It’s called “Don’t Buy Stuff“. Personal finance bloggers love it. It’s still hilarious even now. The skit, at one point, talks about buying items with money you save up. And where, asks Steve Martin’s character, can you get the saved money?

As you probably know, saved money comes when you plan ahead, live within your means, and set money aside for the future. The magic of saving up to buy things is that you end up with the money to make purchases, without being burdened by debt.

Avoid Paying Interest

From a strictly financial standpoint, saving up to buy things means that you spend less overall. One of the pitfalls of borrowing, and using credit cards, to buy things is that it is easy to forget about the cost of interest. Interest represents a premium you pay for borrowing money. Indeed, interest doesn’t purchase you additional goods; it does nothing but enrich whoever lent you the money.

Photo by Images of Money via Flickr

When you buy something on credit, you could pay back much more than you owe. Depending on how much you borrow, the interest rate, and how long it takes you to repay the loan, you could pay as much as four times — or more — the original cost of the item. It is conceivable that you will still be paying for something long after it has fallen into disuse.

You can save money — to the tune of thousands of dollars over your life time — if you save up to buy things, rather than buy them on credit. On top of that, after waiting to save up for something, you might decide you don’t want it after all. That means you have more money to put to work for you, by padding your retirement account or starting an income investment portfolio.

Create a Plan to Save up for What You Want

One of the best things you can do is create a plan to save up for what you want. In some cases, this isn’t too difficult. Saving up so that you can purchase a $300 video game console doesn’t take too long — you can do it in six months if you set aside $50 a month. More expensive items, such as vacations or big screen TVs, might take more time. However, it is still within the realm of possibility to save up for these items.

Look at your spending, and see what money leaks are costing you. Then, divert that waste toward your goals. You might be surprised at what you will be able to set aside. Figure out how long it will take to reach your goals. You will feel accomplish as you work toward your savings goal, and it will feel all the better, knowing that you don’t owe anything to anyone, and realizing that you are firmer financial footing.

About the Author

By , on Sep 16, 2011
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

Leave Your Comment (5 Comments)

  1. @impulsesave says:

    Haha I had never seen that before. Good stuff!

  2. Tiffany says:

    I agree with saving up to buy the things you want. However many don’t want to wait or don’t have the discipline to save and wait. I found that if I really want something I can afford to wait until I have the cash to buy it. Of course waiting until I have enough to buy a house in cash might be a stretch.

  3. Vincent says:

    Saving is a forgotten art. Too many people worry about making more income or the nuances of asset allocation. Simply saving money is a tactic that can work wonders. However, I can see how saving may be difficult for people who make under $50-$60k a year. Especially if they live in an expensive area. That amount of money will barely pay for rent in NYC/LA. It all comes down to how bad you want something and how much you’re willing to sacrifice for it.

  4. Cherleen says:

    Same here KC. Except for large purchases, I would prefer to buy stuff in cash.

  5. krantcents says:

    I refuse to go into debt to buy the things I want. The few exception would be a home or car.

Leave a Reply

Your email address will not be published. Required fields are marked *



The information on this site is strictly the author's opinion. It does NOT constitute financial, legal, or other advice of any kind. You should consult with a certified adviser for advice to your specific circumstances.

While we try to ensure that the information on this site is accurate at the time of publication, information about third party products and services do change without notice. Please visit the official site for up-to-date information.

For additional information, please review our legal disclaimers and privacy policy.


Moolanomy has affiliate relationships with some companies ("advertisers") and may be compensated if consumers choose to buy or subscribe to a product or service via our links. Our content is not provided or commissioned by our advertisers. Opinions expressed here are author's alone, not those of our advertisers, and have not been reviewed, approved or otherwise endorsed by our advertisers.