Thanks for joining us for the last part of teaching kids to spend! (If you’re here for the first time, you can start with post 1.)
It occurred to me as I was sitting down to write this that perhaps I wrote these in the wrong order. Today we’re going to cover some questions to ask before you spend.
So far we’ve been talking about buying items at a cheaper price. Now I’d like to venture into the philosophical realm and ask…
Do I need it?
Ask yourself, “Do I actually need this thing I want to buy? What would happen if I didn’t buy it?”
Being able to correctly identify a need vs. a want is really important when it comes to mastering your finances.
Just to review, a need is something you have to have and can’t live without, like food. A want is something that’s nice to have, but not completely necessary.
Unfortunately, when it comes to wants, I think people try to justify why they actually need a certain item and not just want it. (This is where you can get into trouble.)
Michelle at Making Cents of Cents says you don’t need everything and Paula Pant on the Balance suggests a 50/30/20 budget where 50% of your budget is spent on needs, 30% on wants and 20% for savings.
Note that I’m not saying that you should only buy things you need. You can definitely buy things you want, too. In that case, you should ask, do I really want it? And if so, how can I save for it? (J did this with a Lego set last year.)
Remember, you can have/be/do anything but not everything. Everyone makes choices with what to do with the time and money they have. I, like many parents, say — “make good choices!”
Why do I think I need it?
Last month I read Build a StoryBrand: Clarify Your Message So Customers Will Listen. I’m a freelance WordPress + Web Developer, so I’m always looking for ways work on my message and help my clients work on theirs.
The author writes:
“Let’s take a look at the biggest motivator your customer has for making a purchase: the desire to become somebody different. [There exists] the human desire to transform. Everybody wants to change. Everybody wants to be somebody different, somebody better, or, perhaps, somebody who simply becomes more self-accepting.”
These words hit me like a ton of bricks.
This is exactly what happens when I walk into a bookstore. So many books call out to me, especially in the self-help and business sections. I desire so much to transcend and be a better version of myself — happier, healthier and more successful.
So let’s take a step back. Marketing people know this. They know that I want to be somebody different, somebody better. They know you want to, too.
Do you think they’ll use that to try to sell their product?
Do you think they’ll try to make you think you need their product?
Look around at everything you’ve purchased in the last six months. Are any of them related to what the author calls an aspirational identity?
Cait Flanders talks about this in The Year of Less.
Cait bought so much stuff because she wanted the ideal version of herself to use it. Now she asks herself, “Who are you buying this for: the person you are or the person you want to be?” And says, “I had to let go of the stuff I wanted the ideal version of myself to use and accept myself for who I really was.”
In the book she talks about her year-long shopping ban (only buying necessities) and how she got rid of over 80% of her belongings.
I was talking with a friend recently about the phenomenon of thinking we need something. When they moved into their house, her sister asked when they were going to replace the old appliances. My friend had no intention of replacing the appliances because they were in perfect condition. When one did break, they replaced it — leaving the other appliances to not match. Gasp.
The conversation reminded me of this awesome, thought-provoking article, Are Home Renovations Necessary? The home improvement industry is worth billions, but maybe there is nothing wrong with your house.
Can it wait?
I’m currently reading Profit First (another business book!). In it, the author talks about the “Just One More Day” game. When he’s identified something he needs for his business, “he challenges himself to go just one more day without the item.”
Sometimes he finds that he doesn’t actually need it. And other times, he finds that he can come up with an alternative.
Waiting is a popular sentiment in the personal finance realm. Dave Ramsey advocates waiting to help with impulse control (see #3). Others advocate adding the item to your wish list and coming back to it later. If you find you still want it after a fixed amount of time, like a week or a month, go ahead and get it. At this point, the urgency and emotion have passed, and you’re in a better place to determine if you really do want the item. Check out this strategy in action on The Simple Dollar.
Can I do without it?
My grandmother exuded thriftiness. She used to open her mail with a letter opener (nice and neat) and then cut the envelopes in half to use as note paper. She had a stack of them on her dining room table.
In the past year I’ve found that I can do without shaving cream and disposable bathroom cups. For shaving, I use another type of soap that I already buy and for the bathroom, we now use plastic cups that I just wash now and again.
Now I don’t have to:
- Save the money to buy these things
- Go to the store to get them
- Schlep them home
- Put them away
- Store them
- Throw away the packaging
- Enter the transactions in my checkbook
- Categorize the expenses
- Do it all again next time
It’s really freeing.
Can I use something else?
A few years ago I was reading about safety razors on Reddit. (Reddit has a love affair with safety razors. They’re so much better, easier, faster, cheaper and on and on. Okay, Reddit, we get it.) I did some research and asked for one for Christmas. No more buying expensive disposable razors. I found some blades I liked and asked for those for my birthday. 100 blades and I’m set for YEARS. This has saved me a lot of money (and trips to the store).
Is there something else you can use? Something you already have? Or something that’s cheaper? Get those creative juices flowing.
Or can I fix it?
Gone are the days of darning socks, but if you look around your house, I’m sure there are still some things you can fix instead of replacing. YouTube is a great resource for how-to videos so you don’t even have to worry about not knowing how to do something — you can learn! I bet if you try it, you’ll feel good (and accomplished), too.
I have a dish drainer in my sink and the bottom rubber had worn off, leaving the metal exposed. It was starting to rust and stain my sink. Everything else about the dish drainer was completely fine, so I bought some liquid rubber and dipped the legs. Good as new!
Do I need to buy it? (Can I rent or borrow it?)
When I was young, my mom would take me to the library once a week. I picked out a few books and a VHS tape. All free. Week after week.
The library is so much more amazing now! Not only can you get physical books and videos from your library, but interlibrary loan is way quicker and easier. I have the entire library network of choices available to me.
AND more. We love checking out ebooks. Our library also offers a free subscription to lynda.com and Mango languages. How cool is that?
The library is a common example, but think about other places you can rent or borrow what you need. Friends? Family? Is there a service that may let you do this? Check out this Rockstar Finance article about renting everything from cars to clothes.
Can I get it cheaper?
We’ve talked in previous posts about finding items cheaper, but one thing we haven’t yet discussed is buying used (which is generally cheaper).
I’ve heard that there are people who don’t like used items. This concept is totally foreign to me.
I love thrift stores, consignment stores, garage sales, hand-me-downs and Craigslist.
If I can get it cheaper, I’m all in.
My parents and extended family are big on buying used. Finding an amazing deal is cause for celebration and bragging rights. Finding another use for something is commonplace. It’s all part of our family culture. Is it part of yours? Or do you shun used items?
Or can I use it longer?
I love this post from The Luxe Strategist about her $140 jeans being a frugal buy.
When J was 3, we bought him a book bag from LLBean. It was $55, which seemed like a lot to me, especially for a 3-year-old. But I knew he’d use it for a long time. We’re still going strong with that book bag (he’ll be in 5th grade this fall).
So far, he’s used it for 7 years. $55/7 = $7.86/year. I don’t know where you’d be able to get a book bag for $8.
An added benefit — we don’t have to go out and buy a new one each year. No trip out, no spending money, no argument about which one, no needing to get rid of the old one.
What you’re buying doesn’t have to be expensive to use it longer. It just has to be of good enough quality that it will last. (Taking care of your things also makes them last longer!)
If you think before you spend, you make spending intentional and less reactive, which will put you in a better place financially.
What about you? What ideas do you use in your household or family?