Questions to ask yourself before spending money
Why do you save? This question is spotlighted enough in the personal finance world that if I asked it in a room, I'm sure I'd see arms waving everywhere. For a rainy day, a downpayment, early retirement, any type of retirement. Pick a goal, slap it on your savings account. But what if I asked a different question: Why do you spend? Cue the crickets.
Or the guilt-ridden justifications and lame excuses. As someone whose love of spending virtually stalled out our dreams and undoubtedly cluttered up our house, I'm very well versed in justifications and excuses. It was on sale. It was really on sale. It was too cute to pass up. I tutored extra. I had the money. It had one of those glorious Target clearance stickers on it. You get my drift.
Once I saw the error of my ways, I grabbed the wheel as quickly as I could and overcorrected like a fifteen-year-old on a learner's permit who was afraid she might hit a chipmunk (hi, Dad!). I would spend nothing. Nothing. Hear me roar. And it worked for a while. We ate through our groceries. Even the freezer-burned treasures I mined from the depths of the freezer. I haven't purchased a new outside–aside from maternity pants–in years. I kept those credit cards locked down. We paid off over $50,000 in debt in two years on two teaching salaries.
But I also realized how miserable never spending could be. So now I'm at the most challenging financial crossroads I've faced to date: figuring out why and when I should spend while staying focused on our goals. Because everyone should spend. Everyone needs to spend. And not just in emergencies and not just on needs. Now, before I part ways with cold, hard cash, these are the questions that I consider:
- How will I use it on this exact date next week and next month? If I can't envision myself using a zucchini spiralizer on February 13 and March 6, then I don't need one on February 6. When we first became homeowners, we were dazzled by the vast assortment of virtually everything that we could justify buying. We quickly learned, though, that if you can't find a repeated use for something in your life, the real value is in borrowing or renting rather than owning.
- What do I gain? If I can't articulate the actual value it adds to my life, my life was perfectly fine without it, thankyouverymuch. The perfect example of this is when I bought four pairs of the same wedge in four different colors. And wore none of them. They added a great deal of variety and even a little je n'ais se quoi to my wardrobe in my mind, but really, all they did in the real world was give me blisters and die a dusty death in my closet.
- What do I give up?In addition to the trick of figuring out how many hours of work it takes to afford something, I also consider closet space and future goals. If spending all my money now prevents me from achieving something later, I should step away from the shoe display. This is also how I finally parted ways with extreme(ly) stupid couponing. Because I was giving up my kitchen table, my weekends, and my sanity to chase down Tide BOGO deals only to come face-to-face with empty shelves and rainchecks.
- Who else does it help or harm? Basically, this is how I justify all of our charitable giving. If money were really just about me, no one would read this blog. How we spend, save, earn, and give impacts us all. I also think hard about sustainable practices, animal cruelty, and fair wages. I can't say I'm the perfect consumer by any stretch of the imagination, but thinking about the biggest picture definitely helps me pare down my spending impulses.
So tell me...How do you decide when to spend and why? Feel free to drop your links in the comments, too!
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