5 Questions to Ask Yourself Before Each Purchase
To live in a civilized society means to make and spend money. It’s a luxury to buy things with the money we earn, but it’s also a burden—particularly when we accumulate items that don’t bring us value.
Ensure your day-to-day spending keeps you on a solid financial track. Ask yourself these five questions prior to every purchase.
Do I Need This? Or Do I Just Want This?
When it comes to everyday purchases, nothing cuts to the core quicker than deciphering between wants and needs. Asking this question doesn’t mean one should bypass every desire. Rather, the question is designed to make us think twice about how much we want something. Taking a few additional moments to ponder a purchase will often be the difference between avoiding spontaneous buys and regretting them.
Have I Budgeted for This Purchase?
A key aspect of sound financial hygiene is to live within our means, and our budgets play a significant role. While it’s not necessary to document your every purchase to maintain good financial standing, you should have a clear vision of your spending categories and what they entail.
For instance, if you have $400 per month budgeted for overall food costs, you’ll have an easier time evaluating whether the organic produce or dinner at the local pub is a better way to spend money. Also consider how deep your holiday pockets can go? Heed advice from Freedom Financial Network CEO Andrew Housser and aim for moderate holiday spending. After all, it’s the thought that counts, not the number of gifts.
How Often Will I Use This? Will I Need This Regularly?
Sometimes it’s better to go cheap, but typically, it’s worthwhile to ‘buy it for life.’ Of course, one could only know if they ponder how often they’ll use or get value out of the purchase.
If you’re looking for a drill for a one-time project, you shouldn’t buy a DeWalt. Likewise, if you’re in the market for a kitchen knife set, avoid price-friendly block sets. Aligning your spending with your usage will save money, cause less frustration, and most importantly, encourage better spending habits.
Can I Buy It at a Discount and Get the Same Function/Benefit?
As consumers in today’s fast-paced society, we have an assortment of ways to buy the things we need. From brick-and-mortar thrift stores and consignment shops to online marketplaces like Craigslist, eBay and Facebook marketplace, there’s no reason to pay a full markup on any product.
When considering any purchase, it’s helpful to use a price-comparison app to ensure you’re getting the best deal.
Have I Asked Anyone in My Network About It?
Many of the purchases we have to make in life aren’t needed long-term. But instead of asking our networks, we usually bite our tongue and shoulder the cost. Whether it’s pride or shyness, money is being wasted.
It’s worth asking the people in our lives for assistance or guidance before haphazardly committing to a big-ticket item. Today’s social media landscape makes this easy to avoid. Consulting our networks before paying full price for something may yield price discounts, product recommendations, and in some cases, being lent the item to serve the one-time purpose (carpet cleaners, anyone?)
A lot goes into practicing daily financial discipline, but these five questions are an excellent baseline to ensure you’re making purchases that serve both your wallet and long-term needs.