How Urgency and Demand Makes Everyone Spend More Money and How You Can Use Time to Avoid This
Lack of planning with your purchases hurts your wallet.
We purchase items when we need them. But by doing so we often increase the amount we spend, and with the current supply chain crisis, it is becoming more important to time the market.
Here’s what happens:
When demand outmatches supply, costs go up
We see it everywhere currently:
🚗 Used cars are shooting up in value due to the chip shortage.
🏘️ Houses are skyrocketing in price as there are building supply shortages.
⛽ Fuel prices are increasing.
Now many of these purchases are essential to people’s lives and unavoidable.
But if you are able to make a sacrifice in the short term, you can save huge amounts on costs.
Supply will catch up to demand
With the chip shortage, you have a typical depreciating asset shooting up in value.
There is an expectation of the chip shortage to settle by the end of the year. As soon as the market catches up, used cars will return to their normal value.
We see it on Amazon too. If you purchase a Christmas advent calendar a few months before December, you will get a good price. But waiting a week before December, Amazon sellers will shoot up their prices.
Sellers take advantage of your lack of planning.
How you can use time to save money
If you see an event coming up in the future, such as Christmas, make your purchases early.
Even better if you can purchase your presents straight after a seasonal event, in advance for the next year.
For purchases that are high in price now, look to see how you can use time to your advantage.
If the cost of buying a newly built house in 3 months is far greater than buying a similar house, that will be built in 14 months. If you can afford to wait, you can save yourself thousands.
While the housing market is unlikely to cool down soon, other products which have supply shortages will.
If a product seems expensive now due to market demands, ask yourself: ‘do I need this purchase now?’
You can save yourself a lot of money with planning and delayed gratification.