We’ve all done it! We’ve bought something we don’t really need, spent money on an impulse, tucked something away because we didn’t like it after using it just once or even given something away because we never used it. The question we have asked ourselves whenever we did any of this was, “why did I even buy this in the first place?”
So why do you really buy things?
Psychological studies say that we don’t buy things to own them. We buy ‘how things make us feel’. This means that if owning something makes you feel smarter, more important, more efficient, more stylish or any combination of all these, you’re more likely to buy that thing.
This brings us to the core idea that we sometimes tend to forget: Spending is Emotional.
And, every time we are at a store, most of us are aboard this emotional roller-coaster. The first step is accepting that there’s a spending problem. And, the next is to realise that more than half this world’s population is right now living paycheck to paycheck, trying to pay off the accumulated debt from things they bought in the past.
How to tackle impulsive spending?
Studies have found that up to 20% of the average household’s grocery bill comes from items purchased on impulse alone. What many of us try hard is to bring this impulse under control. Understand that when you stop spending money on an impulse purchase, you are saving it and it can be either put away or used for something more useful for you at that point. So, here is a strategy that will help you do so.
The next time you’re at a shop and have picked up something on an impulse, ask yourself these questions:
1. Do I already have one?
Studies say that the average American household owns almost 300,000 things. So it is quite possible that you already own something that fulfills the purpose of the thing that you just picked up. Asking yourself this question will make you think if the item is really necessary for YOU. For instance, if it’s a food processor and you never cook, you really don’t need it. As a product, the item may be worthy enough. But think of whether or not it works with your lifestyle and habits.
2. Do I have to give up on something else to afford this?
If you’re into budgeting, this becomes a crucial question. Will this impulse purchase disturb the balance of your budget? Or, will it have you making adjustments to be able to afford it? This question will remind you of the direct impact the item has on your finances. It makes you evaluate whether this purchase is worth giving up something else that you had already planned to spend on. This will be even more interesting if you’re going to pay for it by credit card or in installments later. There’s nothing wrong in doing so, but asking yourself this will help set your priorities straight and make you slow down before making the purchase decision.
3. Is this the right time to buy this?
If the item has passed both the tests above and you still decide to go ahead with it, ask yourself whether you need to buy it now or later. Is it something that you need at this very moment? Or, is it something that you can buy in a few days or maybe next month? This question is not just about whether the purchase can be deferred, it is also about price fluctuations. Some things cost the same all through the year and some others become cheaper with time. Consider this as well before you decide to make the purchase. Like all the other questions, there is no right or wrong answer to this. Your honest answer is what matters.
4. Will I be using this for long enough?
So you don’t have something that fulfills the purpose of the object you picked up, it’s not going to be too much of a strain on your budget and you need to buy it now for sure. Right? Then, the next question to ask yourself is two-fold. One, for how often will you be using this thing and two, will it last long enough? For instance, if you’re someone who doesn’t invite people home all the time, you most likely don’t need that fancy, 12-piece dinner set. And, if you’ve already paid up for a year worth of gym membership, then you probably can delay the purchase of that home exercise equipment as well. This question will make the final filter for your purchase by determining whether you’re buying the item for the right reason.
Using The Essential Spending Checklist
When starting out, it works well to use these four questions as a quick checklist before you purchase something. What we are trying to do here is to figure out whether we are spending money on something that is needed, useful and durable. This essential spending checklist will, thus, not only help you make smarter and more meaningful spending decisions, but also eliminate a lot of junk from your life and home.
Over to you
Most of you may have similar checklists that you go through, in your head, before you make a purchase. Share your spending checklist with us in the comments section below and let us know what you would add to ours as well.