Understanding how the 30-day savings rule works

Most everyone is looking for ways to save money, given the state of the economy. Here's a great tip to save your hard-earned money.

The premise of the 30-day savings rule is straightforward: When faced with the temptation of an impulse purchase, wait 30 days before committing to the buy. During this time, take the opportunity to evaluate the necessity and impact of the purchase on your overall financial goals.

Some questions you can ask yourself during the month-long interval before making a decision on the purchase are:

• Is the item/service a need or a want?
• Can I afford it without sacrificing other financial goals?
• Have I researched better deals and alternatives?
• Can I allocate the money to a higher priority?

You can apply the rule to both large purchases and small daily expenses. Imagine being tempted to purchase a high-end electronic item for $800. Waiting 30 days provides time to assess whether the item is a genuine need or a fleeting desire, encouraged by flashy marketing.

Or, consider a daily habit, such as buying a cup of specialty coffee for $6. Over the course of a month, this routine can accumulate to $180. Applying the 30-day rule in this case might mean making coffee at home for a month and potentially redirecting that money toward savings or debt repayment.