Constantly Question your Purchases
If you have to intensely justify a purchase, chances are that you don’t really need it, or that you can’t afford it. Maybe both. Go with your gut and consistently remind yourself that you should not finance fun. If you want to purchase a big ticket item, save up for it instead of running yourself into debt. You might feel free during a financed trip to the Bahamas, but when you get home, your shackles will be just a little tighter than before.
Attach Emotion to Spending
When a purchase feels really good, it is something to question. Not everything that we need to buy is very exciting. We need to pay our mortgage, rent, utilities, food, etc. While grocery shopping is ok, paying a mortgage never is, and I’ve never seen anyone do a jig after paying a water bill. But think about how amazing it feels to book a trip, or click “buy” online at your favorite retail store’s website. Focus less on the thrill of spending and having, and more on how badly it feels later when you realize you can’t afford something you need. That is a feeling worth avoiding at every cost. When you create a bond with your money instead of with things, you will have more money and more financial power.
Don’t Buy a Need Based on a Want.
Make decisions based on what is needed, and don’t let wants get in the way. It can be easy to justify a purchase and go out of your spending plan by convincing yourself that you need extra features that want and don’t need. Decorating your need like a Christmas tree can cost you exponentially more.
Here is an example of what I mean. You need a new coffee maker. You want one that makes coffee in under a minute, that has a timer and that makes a really pretty light show. In fact, you think having an espresso machine/coffee maker combination would be best, just for when you want a latte instead. So you end up choosing $400 machine when the $30 would have done exactly what you needed: make coffee. That need for coffee machine was juiced up by a want of bells, whistles, tinsel and lights. Most love affairs with aesthetic features fade after a month, so think less about aesthetics, and more about utility.
Don’t Stop Buying, but Stop Before Buying
You can’t stop buying, but you can buy smarter. Think about all of the effort and hours put into creating a budget and assigning all of those hard earned dollars. Remember that you should aim to own everything, and owe nothing. The only money you should ever owe is money for savings, retirement, kids’ college, etc. Remember: never finance fun! When making a purchase, answer the following questions:
- What do I need to get by?
- Are the extra features worth the money?
- Is this useful or just nice?
- Will I be excited about the extra features six months from now?
Always do your research before making a purchase. Online forums are amazing for candid and honest reviews of items. Don’t just focus on the positive reviews, but look for the negative reviews as well. I was stuck on buying a certain type of printer because of the reputation, but instead ended up buying an off brand printer that had the one feature I needed (two-sided printing). I saved money by letting go of the brand and focusing on the need at hand.
By learning to become a better consumer, you will have more financial power and more freedom in your life. It starts with the basics and forgoing minor conveniences and decorations that equal dollar signs.