When Saving Isn't Saving

One of the biggest saving mistakes people make is thinking that they are "saving money" when they are actually spending. It's all about your mentality. Many people think that they should buy something just because it's a "good deal." It might not be something you normally buy, but if it is a bargain, it's easy to try and justify getting it. Once you fall into this trap, you can brag about how you "saved money" all you want, but the reality is that you are spending money on something that you don't need -- or possibly even really want.

Before you purchase something because it's on sale, ask yourself these questions:

1. Do I need it?
2. Have I been planning on buying it anyway?
3. Do I actually want it?
4. Will I actually use it?

You should be able to to answer yes to at least two of the above questions. If you are buying based on question #4, you should ask yourself a couple of follow-up questions. If you can't specifically answer the following, then you probably won't actually use it:

• What will I use it for?
• How often will I use it?
• Why do I think it might be useful?

You aren't actually saving money on purchases you make. You're spending money. And you aren't getting a real deal unless it's something that you would buy anyway. Otherwise, it's just a waste of your hard-earned cash.

Examine your spending habits and determine whether or not all of those "bargains" are really money savers for your personal finances -- or whether you are just spending money to spend money.