Say Yes to the Designer Dress? Maybe Not.
Just because you’ve got to have it, does it mean you should buy it? We all have that urge to grab things out of impulse – and more often than not, end up paying for something that we might use just once; or even never at all. It’s nice to be able to splurge on yourself once in a while, of course, but it can turn into a habit that could leave you financially strapped if you don’t rein it in. So here are some things to ask yourself when that shopping bug strikes.
Do I have to have it NOW? Can it wait?
Time can make so many things clear, including if you actually need something, or whether you’re intent on getting it for some other reason. You could just be shopping emotionally, stress-buying, reacting to something somebody said, or just giving in to peer pressure – none of which are good reasons to spend your hard-earned money on what could turn out to be a meaningless buy. Tip: If you’re buying online, leave it in your shopping cart for a day or two and see if you end up coming back to it later.
Can I afford it?
More importantly, can I actually afford not to have it? Many times, spending is a spur-of-the-moment decision that only really hits home when that monthly statement arrives. Surprisingly, you are probably more likely to look at affordability if it’s a single big ticket item – a branded bag, a kitchen appliance, a gadget – than if it’s a bunch of supposedly negligible “small” purchases. This is because you know that a major purchase has to be weighed against affordability, as opposed to little bits and bobs that inevitably add up to make a dent on your wallet. Tip: Save up for big purchases by giving up on small, usually unnecessary, and seemingly cheap items.
What am I giving up if I buy it?
Oftentimes, buying something you didn’t plan on could lead to disruptions for things you do have plans for. For instance, if you make an impulse purchase that affects your travel plans, or child’s education, or self-improvement goals. It’s not always the current situation that matters, but the impact of buying it may rear its head in the future. Tip: Allocate some finances for “sudden” purchases up front so you don’t go off-course too much.
Should I use cash or credit? Is it worth borrowing for?
Nowadays, spending more than you currently have is easier than ever before. You can use a credit card, convert it into monthly installments on an app, or even borrow from a loved one. But is what you’re buying really worth doing that for? There’s no easy answer to this, but as a rule of thumb, you should only do it if it adds immediate and tangible value to your life. Tip: Is it a “must-have” or a “good-to-have”? Buy the first type with cash, and second type only if you have enough after.
These are just four simple questions to hopefully help you keep your spending in check. If you need more ways to manage your money better to be financially resilient while also living a meaningful, enjoyable life, you might find something of value through the #SediaPayungKewangan campaign by PIDM. Learn more here www.pidm.gov.my/spk