Friday, December 18, 2009

Before you make that purchase...

Heather and I have come up with a system that has really started working to jointly control any compulsive spending and I thought I would share it. It started off with the first two questions but we have expanded it to 3 questions we ask one anothee in order to better think our purchases out. I added just some of the sub questions which have come up in my mind when thinking out the answers recently.

1) How often would you really use it?
-- Is it worth buying another item for how often it will be used?
-- Do you need it or just want it?
-- Can you borrow or try it out before committing to spending the money?
-- Is there something that you can sell or get rid of first to offset the cost? We do this with cars all the time, but not other things we buy.
2) Are their cheaper alternatives?
-- Does this purchase have reoccurring costs such as supplies being more expensive than alternatives?
-- What are the tradeoffs to the cheaper alternatives?
-- How long will the cheaper alternatives be good enough?
3) Can the money be better used elsewhere?
-- If you used the money to pay down debt would you end up being able to afford something better in the long run?
-- If you aren't going to use it often, would it be better to support a charity or a friend in need?
-- Would letting the money grow in a savings or an investment account be better while you think it out?

Try it and let me know if you come up with other short questions to add to the list


Rhys Ulerich said...

Excellent list, but it entirely rules out beer. Be careful man, be careful.

Erik Burckart said...

Ha! Just build a beer fund into your budget and then its no longer compulsive spending if its within the budget.