STOP!! WAIT!! THINK!!
Right now, while you are reading this, I want you to mentally insert the sound of car tires screeching to a halt!
There are four important questions you should ask yourself before making that purchase.
QUESTION #1: “Do I need this?”
As I get older I realize that there are a lot of things that I like and very few that I actually need. Recognizing the differences between our wants and our needs is a critical skill in today's world. There are a good many things that are presented to us under the guise of "needs". But, I would challenge you to consider whether your purchase is actually something that you need. Is is something that will sustain you? If it something that you will use long or short-term? Is is something that you could rent or borrow? Is it a redundancy of something that you already own?
Here's a great way to avoid this pitfall: Know what you have! Inventory your shelf stable items. Inventory your bins of hand-me-downs that you have stored in your garage, waiting for your kids to grow into them. I place each size in a separate bin and clearly label the size on the outside of the bin. I once read an article that said that disorder costs you money. I thought, "No, that's not true." But, then I became aware of how many times I bought an item merely because I was unaware that I already had it sitting on a shelf at home.
QUESTION #2: “Do I need this now?”
As you can see, this differs from my first point in only one small aspect - the addition of the single word "now". I have to make use of this distinction nearly every week. I feed a family of six on an average of $450 each month. Given this food budget, I often make a list of items that we need and then rank them in order of importance. I want you to incorporate this same system with every single purchase. When you are living under the median, it is imperative that you prioritize every item.
Years ago Larry and I enjoyed going to auctions. We would watch as bidders' eyes glazed over when another bidder drove up the price of an item that they wanted. Their features would almost transform as they made battled it out to be "the winner", at an often unbelievably inflated cost. When the almost opium-like rush of purchase-induced fever dissipated the next day, I'm sure that they could clearly see that they really didn't need that item at all.
3 quick tips for avoiding buyer's remorse:
1. If you have a friend who likes to shop and you go along "just to see what she finds", I won't tell you to get a new friend, but I will advise you to find a new hobby to pursue. Even thrift store shopping can be detrimental if you have a propensity for impulse buys.
2. If always encourage folks to wait 24 hours before making a purchase. What's the worst thing that could happen? That cute Louis Vuitton handbag will already be sold? Probably not the end of the world. But, a few times of purchasing without thinking could derail your goals for quite a while.
3. Have a preset amount that you will not spend without checking with your partner. For years Larry and I had a $10 limit. It's more than that nowadays, but not much more. Accountability is a good thing. Boundaries are a good thing, too. :-)
QUESTION #3: “Can I afford this?”
Seems like a simple question, doesn't it? But, how do you judge affordability? It's more than just the price of the item. For those of us who live lean, we must remember at all times that we have goals, we have a budget, and we have an accountability partner. Yep! The knowledge that my husband sees the totals in every budget category on a monthly basis has kept me from spending unnecessarily on more than one occasion.
So, how do we gauge whether we make a purchase? For items like clothing and food, I recommend using a cash envelope system. I have been a budget queen for decades and this is one of the hardest things that I have ever tried to do! I kid you not! At the beginning of the month, place your money for clothing in an envelope. Write the amount available on the front of the envelope. While eying chat cute outfit at the store, simply take the envelope of cash out of your pocket and check to see how much money the envelope contains. If there isn't enough cash, then put the item back on the shelf.
Stringently resist the temptation to steal money from another budget category to pay for that purchase. When you "rob Peter to pay Paul", it will catch up to you in no time flat! If you are living under the median, then your budget is undoubtedly tight. When you take money from another category to indulge a desire, then you will inevitably wind up short on money for something critical when you need it.
QUESTION #4: “How will this purchase affect my future goals?”
The whole idea behind this final question is simple. You must have goals and in order to reach them you just consistently put those goals in front of your face. Period. I lived under the national median income for many, many years and I will be the first to tell you that having concrete goals for the future was not only hard, it sometimes seemed like an exercise in futility. But, I DO know this, without a list of concrete goals and a plan to achieve them, you never will. I am a visual person. It helped me to have a pie chart which showed each goal and a timetable to the completion of each one. I color-coded the pie chart. It was really cool! Well, at least I thought it was.
Take a 3 X 5 card and write down each goal. Color-code your list if you want. Then when that cute outfit (or the perfect living room furniture) is screaming, "BUY ME!", take that card out of your pocket. Remind yourself that you have self-control. You will embrace delayed gratification. You will wait. When you have a plan and you can see in writing that you will have enough money to pay cash for future goals, it's a lot easier to walk away from what seems a bargain now.
Do all to the glory of God,