Final answer:
Sara should consider if she really needs the item, if she can find it cheaper elsewhere, and how the purchase fits her saving goals. These considerations reinforce saving habits and financial discipline.
Step-by-step explanation:
When Sara is trying to build her savings, there are three essential questions she should ask herself before making any purchase:Do I really need this item? - Assessing need over want can help avoid unnecessary expenditures.
Can I find a better price elsewhere? - Comparison shopping can lead to savings by finding the same item for a lower price.How does this purchase align with my saving goals? - Considering long-term financial objectives can help prioritize spending and saving.
These questions can reinforce the habit of saving and encourage financial discipline, which is essential for building a robust savings account.Compound savings, where the interest earned on savings also earns interest over time, can be a tool for growing wealth.
Additionally, understanding the difference between saving and investing is crucial as it can influence one's approach to managing money for future security and prosperity.