When you go shopping do you just buy things out of impulse or is it more of a methodical approach? Is it easy for you to spend your money on that new gadget or do you cringe the thought? If you’re like most people then there’s a good amount of impulsiveness involved in your shopping.
I used to be a little bad about just buying stuff without putting too much thought into it until I met my other half. It wasn’t immediate, but she eventually turned me into a full fledged money hoarder. Now, I’m worse that she is when we’re trying to buy something. Still though, Even we still make mistakes every now and then. However, if you can get that impulsive buying under control you’ll do yourself a huge favor and your bank account will thank you.
First, it’s important to know that these questions are usually asked of things that we don’t buy on a regular basis, like food or toiletries. However, even some of those items can be scrutinized every now and then so that you’re saving the most money that you can. The old saying “a penny saved is a penny earned” is basically the message behind these tips.
An example of an impulse buy that cost me money
I was shopping for a new bed, and I had done my research and found a good quality bed for a good price. I finally made the decision to buy, but when I did I also bought sheets and pillows. When I got home later I found out that I could have bought the sheets and pillows for a lower price from somewhere else had I done the research beforehand.
This is an example of a hidden impulse buy I made that cost me money. I was smart enough to save money on the bed, but then I lost it somewhere else with the items I was not planning to buy. I bought them because it was convenient to buy them with the bed and have everything I needed. It was not the smart financial choice though.
I’m not saying you shouldn’t make any impulsive purchases ever again. No, definitely not. You should buy something you want every now and then just because you want it. Why? Because it can be fun, and it can be healthy to do so. However, you need to limit the budget that you allow for these types of purchases. If it’s a new $2000 TV that you’re looking to buy, then wait and ask these questions before you buy it.
These are the questions you need to ask, in no particular order
1- Do I really need this?
This first question is a tricky one because you don’t really “need” anything other than food, water, and a few other necessities. So if you ask this question your answer will likely be “No, I don’t need it.” However, the real point of this question is to make you stop and think before you impulsively buy. Obviously, you want this item, but let’s figure out if you should really buy it or not, and if you do buy it let’s try and save the most money while doing it.
2- Can I find it somewhere else for less?
Ok, so now you’ve decided that even though you don’t need the item you know that you do want it and you want to figure out if you should buy it or not. There’s nothing wrong with buying something that you want. Actually, you should aim to do it every once in awhile, but before you buy whatever it is you’re going to buy, did you check around to see if you can find it for less money anywhere else?
A quick google search for the item should show you a few places that carries it. You should also check the obvious places online , like Amazon. Amazon isn’t always the least expensive place to buy but it will at least give you something to compare with. If it’s a more expensive purchase then I’d put that much more effort into researching the best price on the item. Also, don’t forget to check places like Craigslist and eBay for discounts on brand new items (yes brand new, and at a discount too).
3- Do I have to buy it new?
This question sort of goes with the previous one that asks if you can find it somewhere else for less. A Lot of the time you can get away with getting the same item, or something similar, for much less if you’re willing to buy it used. Think Craigslist and eBay the next time you want to buy something. You’ll find used and new at places like these, and the savings can be significant.
Some items, like a new bed, you may not want to buy used. However, there are other items, like wood furniture, where buying used might not be any different than buying new, and the savings are worth a look. Don’t be so quick to write off used until you’ve really researched the item you’re wanting to buy.
4- Can I rent it instead of buy it?
Sometimes what you’re looking for can be borrowed and you still get everything you need out of it. For example, a book or movie can be borrowed for free from the library. Why pay for something when you can get it for free? The next time you want to buy something think about whether renting it might be a smarter idea. Another example is expensive tools that you might only need once. Check out your local hardware store for a rental that will save you lots of money and still get the work done.
5- Am I using my money wisely?
At this point you’ve asked all the right questions except for this last one. What else can you do with this money you’re about to spend on a new tv? Could you maybe invest it into the stock market? Maybe you could use it for a new computer instead? Or maybe you just need to move that money into your emergency fund savings account?
The important thing is to figure out if you’re doing right with your finances. We can always save more money for the future, but you need to also find a happy medium and enjoy your money every now and then. What’s the point of saving all your money if you’re just going to use it later.
What’s the difference with using it now and later anyways? Well, there is a difference in how much your money can grow and compound over time if you save it sooner rather than later, but you also have to weigh the cost of not enjoying that TV now or not enjoying that new car this year.
Make your decision and live with it
In the end, it’s up to you to decide what’s best for you and your family. The important thing to take from all of this is that you’ve consciously made a decision to think about how you’re using your money on things that you buy. When you start asking questions about your money you start to make better financial decisions. When you make better financial decisions you can feel good about enjoying that new TV.