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Think Before You Spend: 5 Questions To Ask Yourself Before You Buy

Think Before You Spend: 5 Questions To Ask Yourself Before You Buy

A few years ago, when I first started attending university and working, I often felt the need to spend money on things I didn’t really need. I always felt like I had to keep up with everyone else, which meant buying brand named items and trendy fashion pieces. All of us feel this need for impulse purchases or little splurges from time to time but does this pattern mean we just spend years paying off debt when we could be living debt free?

According to Joshua Becker, author of the blog Becoming Minimalist, the average American home size has doubled in the past 50 years. 

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Becker notes that 10% of households rent offsite storage, and that 25% of homeowners with two-car garages can’t park cars in them. 76% of Americans are living paycheck to paycheck. The average US household credit card debt stands at $15,191.

People are working longer hours everyday and missing precious time with their families in order to pay back the accumulated debt from buying too much stuff. In order to combat this sometimes vicious spending cycle, I have put together some questions that will help you think before you spend:

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1. Do you really need it or are you just buying it because it’s on sale?

I know what you’re thinking: I really do need another black sweater! But, wait a moment, think before you spend. If you already have something functional in your closet, then you really don’t need another one. Sales are there for us to grab bargains on things we really need so if there isn’t something like that right in front of you then step away from the clearance rack. A bargain is not a bargain if the item is never going to be used.

2. Can you get it for less?

Something I continually ask myself before buying anything at the shopping centre is whether it is possible for me to get the same thing somewhere else for less money. Many times it is a lot cheaper to find the same or similar items online and sometimes even overseas depending on shipping costs. If you don’t need the item new, check out eBay and thrift stores to find a similar item at a lower price.

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3. Can you afford it?

This is a big one for many people, especially those who are wanting to keep up with the rat race. Sure, having a brand new designer car is wonderful but are you buying the item just because you want to look a certain way or is it something you need? If you need to go into more debt in order to buy the item, it might be time to let it go and work on saving up for it. If you really want the item, you’ll be happy to wait for it.

4. Is it an impulse buy?

So you had a bad day at work and that $1000 handbag you’ve been eyeing off is looking pretty nice right now. We all fall into the trap of impulse buying or emotional shopping. Impulse buys are the worst kind as there is usually little thinking behind the purchase and a lot of guilt following it. Rather than just buying something when you’re feeling bad, think before you spend and be sure to sleep on it. Alternatively you can add it to the calendar 30 days from now, and if you still want the item after 30 days then go for it.

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5. Can you get it for free?

There are lots of websites where you can find people to trade or swap items with you or who give away items for free. Before splashing out on a brand new printer for your office check out websites like Craigslist.com to see if there is a free or cheaper alternative. There are also yard sales or sales at the rubbish tip where you may be lucky and find a bargain. If all else fails, check out Facebook groups in your area for selling items or ask a friend or family member if they are looking to offload some items.

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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Featured photo credit: Pexels via pexels.com

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