You need to budget for purchases. Even if that means that you think about it for just a few minutes before you plunk down your hard earn money. Justify your purchases; do you need it, does it make sense, can you do without? These are questions you need to ask yourself. They may fly in face of materialism which surrounds us all, but they need to be answered nonetheless.

You may find using a purchase-checklist helpful. Anytime a purchase exceeds what you have in your pocket tick down this list and see if it really makes sense to buy it.

How much is it? Is this a sale price? If so what am I saving over regular price? What will happen if I don’t buy it now? Can I pay cash? Where will money come from? If not cash, what will be credit cost? Is it worth it at price with credit cost added in? Does purchase fill a need or a want? (think hard) Why do I need this item? Why do I want this item? Can I justify this purchase to another person? What would I say? Would I accept these reasons from someone else?

This should help in slowing you down. Couple this with not taking your credit cards with you when you shop. It does take work, but a little extra work is better than being a slave to your debt.

Now with money you save go to work on your debt reduction plans. Work that side of equation as hard as you do spending side. Place as much as you can on your bills. Reduce and eliminate them.

(c)2005 David Wilding

One study has shown that Graham's NCAV strategy works well; in this particular study, portfolios picked using strategy at beginning of each year between 1970 and 1983 would have returned an average annual gain of over 29% when held for only duration of each year in this 13 year period.

Van Tharp mentions an actual investing strategy based on NCAV or Graham's Number as it is sometimes called, in his book "Safe Strategies for Financial Freedom". The strategy as mentioned by Tharp involves buying stocks at two-thirds of their NCAV, and selling a third of your holding when a 50% profit is achieved. If price continues upwards to give 100% profit, you sell a number of shares to make up half your original holding. You now have your original investment back and have a holding of "free" shares.

This strategy can be performed in an IRA using a large portfolio of perhaps 30 similarly undervalued stocks. If market has been declining for several months, there will be several such stocks to choose from. In an up trending market, however, it will be much harder to find good value candidates but diligent investors who do their homework will more often than not be well rewarded for their efforts.

(c) 2005 The Graham Investor - Intelligent Value Investing You may use this article, as-is, provided this copyright notice is kept intact.