No matter how much money you make, taking your time before buying expensive things is always important.
Whether you like to give expensive gifts or spoil yourself, it's important to consider the purchase first because even millionaires can be broke if they don’t have the right budgeting strategies.
Before you buy anything you consider expensive, consider these tips.
What Defines Expensive?
Each person has a different definition of 'expensive' as it depends on your budget.
For example, an item costing $100 could be expensive to one person but only a fraction of another person's spending allowance.
The key is to have a working budget and to know the right questions to ask yourself before purchasing anything that isn't a necessity. Whether the item is $1 or $1,000, considering how you spend your money is important.
How to Determine if You Should Buy The Expensive Items
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Cost aside, it's always important to ask yourself some important questions when shopping for anything that isn't vital to your everyday well-being.
Before making an impulse purchase, consider these buying strategies.
Can you Afford It?
First, of course, you must determine if you can afford the item you’re thinking of purchasing.
To determine this, you must have a budget that’s broken down into paying for needs, wants, and savings.
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Needs: are things you need to survive, such as housing, transportation, medical care, insurance, utilities, and food. These are non-negotiable and should be handled first before any other expenses. |
Wants: are items you don’t need but would like to have. Everyone should have room in their budget for wants, but how much you set aside depends on your income and budget. |
If the item exceeds 30% of your income or takes up too much of your money budgeted for wants, you may want to skip the purchase or wait until you have enough money saved for it.
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Are there Better Options?
Before making an expensive purchase, make sure there aren’t better options available by doing your purchase research. This includes:
- Cheaper prices: Check other retailers to see if anyone has it priced cheaper
- Coupons or promo codes: Search online for a coupon or promo code that may help lower the price
- Alternatives: Look for similar alternatives that may cost less, especially if the item is brand name
Do you Need It?
This question is a tough one, especially at the moment. It may feel like you need it because you’ve fallen in love with it, and ‘have to have it.
Instead of purchasing impulsively, follow the 3-day rule, which means delaying gratification.
Give yourself three days after finding the item. If after that time, it's still on your mind, go through with the steps to determine if you can afford it. However, you may find that you forget about it and didn't need it after all.
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