If you’re like the typical American your home is exploding with junk. We Americans are the world’s pack rats. As a result of our preoccupation with “stuff” we’re drowning in credit card debt, falling behind on our bills and have little in the way of financial security.
Streamline your finances and fight the American “stuff” obsession by considering these money smart questions before making your next purchase.
Do I really need it?
Let’s admit it. It’s easy to convince ourselves a “want” is really a “need.” For example, we need that sharp pair of shoes in order to project a professional image at work. But when we’re really honest with ourselves we can truly start separating our “wants” from our “needs”.
Of course it’s quite alright to indulge in your “wants” once in a while. No one wants to be a complete miser. But make sure your “needs” are taken care of first.
Can I get this cheaper somewhere else?
Before you hand over your hard earned money make sure you’re getting the best deal. Comparing prices on the internet is now easier than ever. Smart phone apps like Google Shopper, RedLaser, and Amazon’s Price Check let you compare prices at online retailers and at bricks and mortar establishments.
Don’t have a smart phone? Ask the salesperson when your potential purchase is expected to go on sale. They just may give you the sale price early.
In some cases you’ll find that the item was recently on sale. In that case ask if they’ll still honor the sales price. You’d be surprised at how often they’ll say yes. That’s how I saved $100 off the price of a new laptop.
Can I rent or borrow this?
Why buy when you can rent for a fraction of the cost? Besides it’s one less thing that’ll end up under your bed or buried in the back of your closet. Nowadays you can rent anything, from power tools and DVDs to video games and wedding dresses. And if there’s something you can’t rent, chances are you can borrow it from a friend or family member.
Can I purchase this used?
New doesn’t necessarily mean better. Just ask anyone whose purchased a slightly used car and saved nearly 30% off the new car price. And with second hand stores, Ebay, and Craig’s List there are numerous ways to find gently used items that’ll soothe your pocketbook.
Do I have a substitute at home?
Often we already have what we need right at home. You’d be surprised at how shopping your closet instead of the mall can be just as effective in putting together that knock-out outfit. It may not provide the same shopping “high”, but your bank account will love you for it.
Will it continue to cost me money?
Some purchases just keep on taking our money long after we’ve paid for them. Sometimes just knowing what you’re about to buy will end up costing you even more money is enough to make you put it back. Do you really want to keep paying the cleaning bills for that dry clean only dress shirt?
Will this item bring me closer to my financial goals?
Goals are the keys to financial success. They stake your actions to what’s really important. When you know you want to purchase a home in three years or pay off all your credit card debt within the next year your spending is put in a new light.
Once you’re crystal clear about your goals you can ask yourself:
Will this purchase bring me closer or take me further away from my financial goals?
Photo Credit: Romona Coreeale