Do you give into impulse purchases and spend more than you intended? Have you ever regretted a purchase within minutes of making it?
To avoid these types of bad-spending consequences, try asking these five simple questions the next time you wonder whether or not to buy something.
1. Do I need this right now?
Note the two parts to this question: “Do I need this?” and “Do I need this right now?”
If the answer to the first question is “no,” you have made your decision.
If the answer to the first question is “yes” but the answer to the second question is “no,” try observing the 30-day rule: Wait for one month before buying it.
Then, see at the end of those 30 days if you still want it as badly as you do right now. Chances are good that you will not.
2. Would I buy this if it was not on sale?
Sales are the folly of bargain-hunters. Many frugal shoppers pride themselves on making a purchase simply because it’s on clearance.
In fact, you may love the deal more than the product you are buying. If the item was full price, would you still be tempted to get it? If it wasn’t a “buy one, get one free” deal, would you really put two in your cart?
3. Will I get enough use out of this?
A good purchase is about more than just getting a great bargain. You also need to get the most use out of whatever it is that you buy.
Can you really see yourself using this item regularly? If it’s a piece of clothing, does it complement the clothes already in your closet? If it’s a kitchen gadget, will it really become part of your cooking habits?
4. Can I get this for less?
If you don’t need the item right away, ask yourself if you can score it elsewhere for a cheaper price. Maybe the store it’s at now will be running a sale in a week or two. Or maybe you can find it at a better price online.
Take the time to do a little comparison shopping and you can likely get that same item for less.
5. Where will I get the money for this?
If the item you are looking at isn’t in your regular budget, figure out how you are going to find the money to pay for it. Usually, this means cutting something else in the budget, such as restaurant meals or magazine subscriptions.
What are you willing to give up so that you can have this thing? If the answer is “nothing,” that’s probably a sign that it’s not a good purchase.
Paula Pant ditched her 9-to-5 job in 2008. She’s traveled to 32 countries, runs a popular finance blog and is a successful real estate investor. Her blog, Afford Anything, is the groundswell of a rebellion against stodgy, uninspired financial advice. Afford Anything shows you how to create wealth and maximize life. Follow Paula on Twitter: @AffordAnything.