When it comes to making purchases, many of us are guilty of buying things that we don’t really want, don’t really need, or won’t really use. It’s easy to let your closet grow so much that you couldn’t possibly wear everything in a year, or your DVD collection to balloon for no reason other than it’s convenient to own dozens of your favorite movies. But when you think about it, there’s no good reason to have a closet that could clothe half of New York City or a DVD collection to rival Blockbuster. If you’re struggling to maintain control of your spending, or you find every time you clean out your closet your Goodwill pile grows by an order of magnitude, the following tips are for you.
1. Before buying, ask yourself the following questions:
- Is the item is necessary? Do you need it? Like really, really need it?
- Can you afford it? Will you have to rearrange your budget or give something else up to pay for it? Everything you buy comes at a cost, unless you have an unlimited income (in which case, what’s your secret?). By buying this item, what will you not be able to buy? Will you have to skip adding money into your savings account for a month or skimp on groceries? Decide what’s worth it.
- What’s your motivation behind wanting the item? Do you want the newest iPhone because all of your friends have the newest iPhone, or do you want the newest iPhone because your old phone is broken? One of these reasons has a little more legitimacy.
- Will having it help you somehow? Will buying the item improve your quality of life or save you significant amounts of time or money in the future? Buying a Kindle could save you money on books, since eBooks are cheaper than printed ones, and subscribing to a meal kit could save you the time you would spend meal planning and at the grocery store. Never buy something that won’t have a positive impact on at least part of your life.
- Will you use it in the future? Buying something you’re going to use once and never touch again is rarely worth it, so you may want to skip the latest fashion trend and go for closet staples.
- Do you have to buy it new? Depending on the item, you may be able to rent, scour secondhand shops for a used version, or wait for a sale. Textbooks are often available to rent or purchase used, and many consignment shops have quality clothing at discount prices. Used cars are great, provided you do your research first. Buying new may be an unnecessary luxury.
- Will it help you meet your goals? Depending on your goals (building a retirement fund, spending time with your family, paying off a large debt), a purchase may or may not be worth it. A high definition TV isn’t going to help you retire or pay off your student loans, for example, but a plane ticket may help you build a better relationship with your family. Consider your long-term goals and whether the item can contribute to them or whether it will set you back before you buy.
- Is it a replacement? If you have only one pair of jeans and they split down the middle, it’s probably wise to buy a new pair of jeans to replace them. However, if you have six pairs of jeans and you want a pair in a darker wash, the purchase isn’t really necessary.
- Are there other expenses associated with the purchase? If you buy a car, you’re going to have to pay for gas, maintenance, and parking—this makes the car a lot more expensive in the long run than just the price of the vehicle. Consider how your budget will change as the result of a big purchase if it does have associated costs.
2. Make a list of pros and cons. This is the oldest trick in the book, and it’s still around for a reason: It works! When you’re considering an item, whether it’s a food processor or a motorcycle, make a mental list of the pros and cons of buying it and assign the appropriate weight to each reason. If the pros outweigh the cons, it might be a smart purchase. If the cons outweigh the pros, though, you should skip it. As an example, imagine that you’re deciding whether to buy a refurbished computer. Among the pros, it’s slightly cheaper to buy a refurbished one than a new one. But the cons? Generally there’s no warranty, the lifespan of the machine is already shortened, and you won’t have access to the latest technology. So the pros and cons list indicates that you shouldn’t make the purchase. You can do these lists for anything (yes, even a cup of coffee!), and the results are always personalized to you, since you know what’s most important to prioritize.
3. Picture the item and a pile of money equivalent to what the item is worth. Would you choose the item or the money? Nine times out of ten, you’re probably going to pick the imaginary money over the imaginary item, so do yourself a favor and save the money for something that you really can’t live without.
4. Delay your purchase. Unless you need the item immediately, take some time to mull over making the purchase. If you find that you still want the item in one week or one month, then consider buying it. On the other hand, if a week passes and you forget what it was you wanted to buy, you probably didn’t really want it in the first place. This is particularly useful when it comes to making decisions about whether to purchase body art or piercings. Take a photo of yourself and work a little Photoshop magic so that it looks like you have that tattoo, piercing, or haircut. Set it as your phone background or screensaver so that you have to look at it regularly. If you like it after a week is up, you might be ready to take the plunge.
It’s very easy to talk yourself into buying something that you don’t really need, but it’s equally simple to rationalize yourself out of it. These tips should help you keep your credit card happy and your bedroom free from an excess of unnecessary items. What’s your secret to making smart purchases?