A personal finance blogger that we love here in Momentum’s Financial Literacy Department is Kerry K. Taylor, also known as Squawkfox. She writes what she calls a “financially fun” newsletter, and has been voted Canada’s Top Money Blogger by The Globe and Mail. She writes on the topic of consumerism and how to be a smart consumer.
In a recent blog post, she shared a simple chart to help consumers decide if buying something is a good idea or not.
The key to working through our spending decisions is to be honest with ourselves. As we often talk about in our Money Management workshops, it’s easy to tell ourselves we deserve something, or find some other way to justify our purchases.
The questions that Kerry encourages you to ask yourself are as follows:
- Do you need it? Telling the difference between our wants and needs is essential in controlling our spending.
- Can you afford it? Does it fit in your budget?
- Have you looked at alternatives? Have you shopped around, or considered buying used? Can you borrow this item from someone?
- …and was this the best deal? Avoid supersizing! Do you really need all those extra features, or is there a more basic model that will do the same job.
- Is it high quality? We should aim to buy items that will last, not ones that will break and require us to buy again.
- Does high quality matter? As Kerry reminds us, not high quality doesn’t imply low quality.
Download the “Should You Buy It” flowchart from Squawkfox.
If you struggle with your spending decisions, consider attending our Money Management workshops. We can help you take control of your money!