I'm trying to develop a way to avoid spending that works for every household member. I believe the key is a set of well defined spending criteria. That would take the emotion out of spending. Thus, spending becomes a "Go, No Go" decision. There's only one problem. Were can I get a good set of criteria? Some are obvious. Is it needed? Is it budgeted? Does it effect faith or health? Can you help with a list of perhaps other questions that are fundamental in deciding what to spend money on?
Thanks. Norvell
Norvell asks an interesting question. And a practical one, too. Every purchase requires us to take some action to make it happen. But, what thought process do we really go through before acting? Not surprisingly, the marketers know much more about the answer to that question than we do. So let's take a moment to see if we can't think it through for ourselves.
For most people it all begins when they realize that they want something. The next question they ask is 'can I afford it?' This is a poor strategy for two reasons. First, they're answering the wrong question. They should be asking why they want the item and whether they need the item. Not deciding whether they can afford it.
Second, affordability can mean different things. Before credit cards it used to mean that you had enough money in your pocket to pay for the purchase. Today many people think that they can afford an item if they can make the monthly payments and the purchase fits under their credit limit.
But, having enough credit to obtain an item doesn't mean that you can afford it. Any time that you borrow money you're assuming that you'll have a continual stream of income to make the payments. All it takes is one illness or the loss of a job and it's much less 'affordable'.
OK. So we know how not to do it. What questions can Norvell ask before deciding that he really should go out and spend a few bucks?
The first question goes back to why you want an item. What are you trying to accomplish? Is it possible to reach your goal without making the purchase? Typically we don't buy something just to have it. We want an item because of what it can do. Or what we can do with it. We want to buy food because we're hungry. Or a house because we need shelter.
But, even this question isn't a simple one. Is your grocery cart full of nutritious foods? And nothing else? Or have you added a lot of convenience items? There's nothing necessarily wrong with convenience foods. As long as you know and approve of spending your money for convenience.
Next, ask what would happen if you didn't buy the item? If you're going out for this week's groceries not buying them could be a real problem. But there are many other things that we can live without and barely miss them.
Could you avoid the purchase by substituting something that you already own? The pioneers knew that they couldn't run to the local store every time they wanted something. They learned to be experts in improvising. You won't always find an acceptable substitute, but it pays to look.
Maybe you could rent or borrow the item. If you bought it today will you use it again soon? The average home is 50% larger than it was in 1955. Our closets and garages are full of things that were only used once or twice. If you won't be using something often it might be wiser and cheaper to borrow or rent it.
Is there some reason that you couldn't delay the purchase? Many purchases seem much less important if you just wait until tomorrow. It's almost mystical how desire evaporates overnight! In most cases waiting one day won't cause a major hardship. But, you will find that there will be some purchases that you just keep delaying and ultimately never make.
If you get this far you've probably answered Norvell's question. But just deciding to buy doesn't mean that you can't still save some money. There are questions that you still should ask.
For instance, must I purchase new? Often a used item can solve your problem just as well as a new one. A two year old car can provide dependable transportation. And it will save you a lot of money. Sometimes you must buy new, but consider the alternatives first.
Is there a cheaper model? The flashy model in the display window got your attention. But you might get just as much satisfaction with a simpler model. And save quite a bit in the process. Remember that most manufacturers make a lot on accessories.
After you answered all of these questions it's finally time to start the actual shopping. Sure, that's a lot of questions to ask before going shopping. And it doesn't make sense for a pack of chewing gum. But even on small items it's probably wise to stop long enough to make sure that it's a minor purchase. It surprising how fast 'minor' purchases add up.
Thanks to Norvell for asking a good question. Let's all save some money using his system.
About The Author: Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website You'll find hundreds of free articles to help you save time and money. Visit Today! Email Gary
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