How to Spend Money Wisely – 10 Points to Build Intelligent Spending Habits

Article by Sherin Dev; Click to Subscribe articles or Follow me in Twitter!

Money! If take a self assessment on our money spending habits, most of us find we are not spending money, but wasting money unnecessarily by not considering the real facts on whether this spending is really worth or not. To save money by prevent wasting unnecessarily, all of us required to build our own set of rules and checklists to confirm no wastage happening prior to spend money for anything. Here are some real thoughts for that, I feel this would help us to think a moment to confirm our action before goes to the billing counter to pay for an item. More over that, these checklists intends to build our own money spending framework to prevent wastage and spend wisely.

Below, 10 questions to ask self before you purchase any item to ensure it worth to you.

1. Do I really ‘need’ it

    Ask this question to understand whether a purchased item is a needed or just a wanted. A ‘need’ item is something that you may required always for your daily life. A ‘want’ is an item that you may purchase because of some kind of immediate attraction happened to that after the very next moment you saw it. It may or may not use regularly. You may have interested to the same for ever or sometime. Not sure. Generally people lose interest to a ‘want’ item after little time or days, thus the money spends on such comes as a big wastage. Before buying, identify whether the item is a needy one or thought to buy just because it attracted you.

2. Is something similar already there with me?

    This would be the second thought to identify whether needs to be buy it now or later. Have a self check to identify whether such item already exists with you or not. If you already have one or similar, buying the same would be an utter wastage of money.

3. Does any used item works?

    If we look around, we would find shops selling used items, factory defect items or online sites that sells second hand items. Most of the time, we would able to find a best item in these places. Once if you plan to buy any item, identify whether a used one works or not. Once OK, purchase the item from a secondary market by paying half the price or a new one.

4. How much I am going to use this item?

    A very important question each person should ask self before moving to the cash counter. How much I am going to use this item? If you look at the point 1, little thoughts would help you to determine the real requirements of an item. Identify the usage of item. Whether it use regularly or rarely? If rarely, purchase of a costly item is a real wastage of money but look for a cheap one.

5. Can I afford it or fall to debt if buys?

    In my personal life, I never purchase any item once if I don’t have sufficient money to pay for that. Falling to debt due to purchasing any item is really pathetic. Avoid borrowing money to purchase anything. Remember the tyranny of credit card holders. Studies reveals that, credit card holders falling to huge debt due to careless spending. consider your financial status before purchase anything especially the one is costly.

6. Can I wait for little more time?

    If you plan to purchase any electronics items, ask this question 5 times self. When introducing to market, most of the electronics items comes with huge price tags and later it would reduce to half or less when similar item introduced from same company or a competitor. There are lots of examples around us. When introduced iPod, the price tag was so huge but it decreased a lot after some time. Upset customers who bought the item when it launched, suite case against company thus apple given back their money. Wait for some time to understand what market tells about its quality and how company reducing its price after launching its renewed version.

7. Is this an item available from sources like friends, relatives, neighbors to meet the present requirement?

    Decision to buy any item that is freely available from your friends, relatives or even neighbors, is a big wastage of money. Such item comes to use some time and buying as own to use rarely is foolishness. Get it from others to use and return back. If still want to purchase one, share money with your friends, relatives and neighbors to buy it as a common for all to use.

8. Is it seasonal?

    Never purchase costly seasonal items. An example, a costly room heater comes to use only at the winter season and later would sit idly for months. This may cause damages to the item. Never purchase a seasonal item at the season instead, purchase it in advance before 2 or 3 months prior the season starts. for an example, refrigerators and coolers are not a best buy at the time of hot summer season.

9. Is there any resale value for it?

    If you are purchasing an item that may not required after one or two years, it is a best practice, purchase an item that have high demand in the secondary markets. Electronic items, automotive etc. are best suitable to this kind.

10. Does this add more burden to my present budget?

    If you have a good monthly budget, you may not need to ask this question prior to purchase anything. You might have kept aside enough amount to purchase your needed items for that month. If any requirement other than allocated amount, identify whether it can purchase in the next month or not. Allocate sufficient money to that monthly budget.

There would be lots of other ideas and questions to build intelligent spending habits. If you have one, share it as comment. If you found any of the above is impractical, inform my why you feel such.

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