Impulsive spending is one of the quickest ways to get into serious debt. If you’re trying to dig yourself out from past mistakes to have a better financial future, consider these five questions every time you feel the urge to go on a spending spree.
1. What is the reason you need to make this purchase?
Every purchase we make has some reason; sometimes, that reason is irrational and needs to be analyzed. Consider the feelings you’re having that are driving this purchase.
If the reason is rational and valid, then all the better. But if you find yourself avoiding digging into the “why” because you know you won’t like the answer, it might be best to walk away and figure out the underlying reason driving your desire to buy.
2. Does the cost equal the value of your time?
Time is money, and the amount of time you spend earning money has value. Consider how much money you earn for an hour of work and look at your potential purchase through the lens of time. Would trading three hours of work for the item be reasonable, or does that suddenly make the purchase ridiculous?
Remember that your time has a limit that you can’t go back on, so pivoting your perspective to see potential purchases as time spent instead of money might make you rethink your spending habits for the better.
3. Would you still want this thing tomorrow?
Impulsive purchases are one of the biggest budget killers out there. If you have trouble getting ahold of your spending, it might be beneficial to enact a 24-hour purchase rule (unless it’s a dire emergency). If you’re shopping online, put the item in your cart and give it a day before pulling the trigger. If you’re shopping at a brick-and-mortar store, take a picture of the item and walk away for now. Chances are, the inventory levels won’t change so abruptly in 24 hours that you won’t be able to come back and get the thing you want after waiting a little while.
Giving yourself time to reflect on a potential purchase lets you take a step back and think about it more logically. Impulsivity is driven by emotion, and that emotion can quickly destroy your financial stability. If you decide that you still want to purchase the item after a day, go for it. But if that 24-hour window gives you a new perspective that makes you decide it’s not worth the money, pat yourself on the back for making your money management a priority.
4. Is this purchase the only way to solve a problem you’re facing?
Thanks to the internet, we have more solutions to problems than ever. Consequently, we can get overwhelmed by the options and avoid comparison shopping altogether. Not looking into alternate options can cause trouble, though.
For one thing, your purchase may not be the problem solver you think it is, which leaves you spending more money on another option. Also, if you’re creative, there could be a way to solve the situation at hand without making any additional purchases at all. Consider the value of learning how to solve the problem on your own through YouTube tutorials, books, or other methods. Whether it’s fixing a leaky faucet, knitting a cool sweater, or anything in between, the long-lasting value of a DIY could outweigh the cost of your potential purchase.
5. What is the impact of making this purchase?
With global issues such as underpaid workers and climate change, to name a few, we all must start understanding the impact of supporting companies that are creating catastrophic consequences. Fast fashion is especially problematic due to its environmental and economic impact. Remember that your dollars not only hold value but power, and make sure the companies you support put that power to good use for us all.
Becoming more considerate of your buying habits can go a long way toward financial stability. Keep a few of these questions in the back of your mind to help turn your purchasing habits into better buying decisions that help increase your money management skills.