“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” —Will Rogers
The average American home size has doubled in the past 50 years. Still 10% of households rent offsite storage and 25% of homeowners with two-car garages can’t park cars in them. 76% of Americans live paycheck-to-paycheck. And the average US household credit card debt stands at $15,191.
It appears we have a spending problem. We buy far more than we need.
And yet, our filled closets, overflowing drawers, and crammed basements stand as proof that purchases are not improving our lives. Our discontent is evidenced in our excess. (tweet that)
In every imaginable category (from homes and cars to clothing and technology), we must find greater intentionality in our consumer pursuits.
To accomplish this, I propose we start asking ourselves some very specific questions before making any purchase.
3 Questions to Ask Before Any Purchase (by category)
Clothing/Apparel:
1. Am I replacing an item of clothing or buying something new? If the item is not a specific replacement, rethink your need for it.
2. Is this something I will wear regularly? If you can’t see yourself wearing the item on a regular basis, rethink the purchase.
3. Is the style one that will last? Don’t believe all the hype of the latest trends, they are manufactured by the fashion industry and change quickly.
Technology:
1. What problem does this solve? Technology should make our lives easier by solving problems. If a new technology is not solving an existing problem, it is only adding to them.
2. Are there any rumors of new advancements to this technology? Technology is changing rapidly. If your purchase is not time sensitive, it may be wise to double-check if a new release is right around the corner.
3. Is this technology I can afford? Keep in mind the full cost is often far greater than the initial investment.
Furniture/Decor:
1. Is my purchase based on a genuine need or a cultural pressure? Am I succumbing to a specific pressure brought on by cultural, peer, or family pressure? Or is the furniture/decor something I truly need?
2. Am I choosing quality over quantity? With furniture, choose quality over quantity. One comfortable place to sit is far better than three uncomfortable options. And one beautiful piece of art decor will provide more life than a dozen cheap ones.
3. Is this style one that will last?
Entertainment:
1. Will this entertainment choice result in rest and value? Entertainment moves our emotion, occupies our heart, and exercises our mind. Or at least, it should. Choose to invest your entertainment dollars in places that will.
2. Am I overusing entertainment to escape my life? There is nothing wrong with enjoying entertainment. It serves an important purpose. However, it can become a personal and financial burden if we use it as a means to routinely escape our own reality rather than face it.
3. Is there a cheaper alternative? A walk in the park or a hike up a mountain is often more entertaining and beneficial than buying another movie ticket.
Food:
1. Will this food add fuel to my life? Unhealthy foods may taste better in the moment, but in the long-run, they detract from our well-being and lifestyle.
2. Are my food decisions contributing to my financial stress? According to statistics, Americans spend 42% of their total food bill eating out. If you are unable to get ahead financially, this is one easy place to start cutting back.
3. Who am I supporting with this purchase? You need to eat. Support your local economy while you do.
Personal Insurance/Health:
1. If purchased personally, have I discussed my options with a health insurance professional? Find professional help with this decision. It is their job to understand all your options (and they are changing quickly).
2. Have I researched the benefits of my existing plan? Am I getting the absolute most out of my current payments? Search dental, vision, and preventive care.
3. Am I pursuing a health-benefiting lifestyle? The most effective way to keep your health care costs at a minimum is to pursue a healthy lifestyle. Accidents and heritage happen, but healthy habits always pay for themselves in the long run.
Transportation:
1. Do I need a new vehicle? If not, why do I want a new vehicle? And is that a good enough reason to spend the resources?
2. How much cash + trade-in have I saved? Always, always buy your vehicles with cash. You won’t regret it.
3. What are the additional expenses associated with this purchase? Calculate insurance, gasoline, anticipated maintenance, and unique circumstances (parking, tolls). Factor these into your decision by comparing several models. Sometimes a vehicle may cost more upfront, but save money in the long run.
Housing:
1. Am I buying/renting only what I need? Choose shelter based on your needs, not what the realtor says you can afford.
2. What will be the additional expenses included in this purchase? Whenever possible, research the utility costs, insurance, taxes, expected maintenance, and HOA fees of your new purchase—especially if you are transitioning from a rental.
3. Will this arrangement bring freedom or burden into my life? Your home should bring you security and stability—not stress. Wisely consider also the impact of potential economic downturns on your home value and ability to make future payments.
Pets:
1. Is this a pet I can afford? Consider all costs associated with your pet: feeding, licensing, housing, cleaning, grooming, pet-sitters, and medical expenses.
2. “Will this animal or pet keep me from pursuing other important goals like travel, hosting others in my home, or financial independence?”
3. Will the benefits an animal brings to my life outweigh the extra work and expenses? Am I able to articulate the exact reason why I am taking on this responsibility?
I am very open to this being a fluid list. Are there any spending categories you would like me to add? Or do you have any specific questions for the categories above you have found particularly helpful? Let us know in the comment section below.
I think children’s toys deserve a special consideration. How often do we as parents buy some small toy at a store just to placate our children. These small things add up to a significant amount of either trash or clutter as time goes on.
Here are some possible questions:
Do they already have one, or two or ten?
Will it last/be useful for a long period of time?
Will they be happy without it in the long term?
One for me would be does it have batteries? That kills it for me.
Cheers
John, absolutely agree with you. Kids don’t want toys, they want to spend quality times with their parents and surrounds. By buying stuff to them, we teach them to be “maximalist”… this is ridiculous!
I don’t buy any toys or clothes to my nephews and nieces at their birthdays or Christmas. Instead I spent some memorable times with then. Bringing them to circus, see movies, play in the park, and other activities…
Nice blog Josh!
Oh yes! We just did a great toy clean out at our house and got rid of about 80% of the kids’ toys! They are so much happier and now want to get rid of even more! They’ve been asking for less stuff, too! More time at the pool, more time at the park, but less toys. LOVE IT!
This is such a great post. It’s so important stop and think about our purchases and how they will affect our lives as well as what our dollars are supporting.
I recently had a fire in my house and was horrified at the amount of “stuff” that was cataloged by the insurance company. Definitely going to use the opportunity to minimize the amount of belongings I will own.
For me the hardest part is to not try that new face cream or that new color blush – even though I have a whole cabinet with skincare already.
I have tried all kinds of reasoning – fail all the time, especially if Im standing in front of a beauty department, so now I just avoid going there until what I have is empty.
Great list, lots of great questions here. For entertainment, I’d use “Is there a better alternative” rather than “Is there a cheaper alternative.” One of the major reasons I decluttered and downsized was so that I could have more time and money for activities, entertainment, and doing fun stuff with my family.
To ask if there is a cheaper alternative would imply that cheaper is better, and that’s not always the case. You provide some good alternatives (walk in the park) but I would consider that a better alternative rather than just a cheaper one.
I would argue that any money/time spent on entertainment is poorly spent. But not money spent on art. Here is how I distinguish between them, Entertainment is to distract myself from the here and now. Art inspires, encourages connection to others. There is grey area, but here are some examples: romance novels are entertainment, Pride and Prejudice is art. Aerosmith’s Love In An Elevator is entertainment, Beethoven’s Ode to Joy is art.
I totally agree with the art vs entertainment distinction, but… what falls into which category is such a personal choice. I have read many romance novels which inspire as well as entertain, while some supposed ‘art’ seems more about showing off than entertaining or inspiring. Maybe I’m showing my pro-romance bias here, but then again, I also think that some pop lyrics are pure poetry (inspiring) while others are mindless entertainment. So I’d still ask the question, ‘Am I doing this to add something important to my life, or just to escape?’ but I’d be very wary of assuming I could answer that question for anyone else.
Awesome post. Sadly we are part of the 10% and the 25%. On the other hand we are not part of the 76% and are way below average in regards to credit card debit.
I was taught to ask the three questions below. If the answer is no to any of them, don’t purchase..
Do I want it?
Do I need it?
Can I afford it?
I like this simpler approach. Whilst all the questions above are good and thought provoking, I found myself turning off the longer I read, it started to become all too complicated. Maybe I’m too simple to be minimalist ;-)
I know what you mean….living simpler means I’ve had to live more INTENTIONALLY– to put more thought into activities that I used to do automatically (…activities which ultimately– decreased my bank/sleep/health ‘accounts’)… And until I get more accustomed to it…it is more ‘work’ — in that it requires thought where I just to just ride high on…an upcoming vacation, new ipod, another bike, …but I like that I feel like I’m LIVING my life, instead of just buzzing along riding high on superficial matters.
When buying technology, it’s good to ask: am I making myself dependent on a company, and are they likely to continue to exist? For example, buying a Kindle means that Amazon is backing up my e-book library on its servers, and I will always need to have some sort of technology to access my books. The same applies to software, whether it’s online tools or desktop computer software. Cloud storage is another one.
Excellent point Tracy B. Can I read without using any energy? When energy becomes scarcer and more expensive, I’ll still be able to read my (old fashioned) books with natural light. I do hope libraries will still be around. . . .
“Who am I supporting with this purchase” might be a good question for all categories. Are their practices ethical (wages, child labor, environmental), are the materials/contents safe/healthy, where do profits go, and so on. These are issues that are often hard to ferret out and aren’t always clear cut, but important considerations nonetheless.
I love the question, “Is it worth my freedom?” My time? My energy?
http://www.theminimalists.com/money/