“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.
Colin says
Great post and comments! I think about minimalism all the time – in belongings and in time commitments. As a guitar player, I regularly struggle with thoughts of “gear” – guitars, amplifiers, effects and the like. It could be Christmas every month! Walter Becker of Steely Dan fame calls this G.A.S. – gear acquisition syndrome. Here’s his humorous article originally printed in Guitar Player:
http://www.steelydan.com/gas.html
Rachel B has good points about minimizing your studio stuff. Less equipment means less upkeep and repair, and more time focusing on the art. Have less, spend a bit more on equipment that will last.
Some musicians have guitars in every closet, hidden the bed, hidden at friend’s houses! I recently let my dad borrow a banjo so I could visualize more closet space. Someday I hope to limit the collection and bond with one versatile instrument – that beats having a room of instruments with little play time.
David J. Singer says
This is one of the most amazing posts you have written, and that says a lot because you have written so many wonderful ones. Bravo!
Jaime says
I would add to the first question under Pets, “Am I ready for the long-term expense that this commitment represents, including inevitable end-of-life expenses? Can I be a good caregiver for an animal that will rely on me for food, safe and comfortable shelter, health care, and love?”
Thanks for this post.
GK says
My own pet situation is unique. I have a pair of sibling cats that I adopted in my mid-20’s. At the time I was single, and my plan was to eventually meet my special someone and have a few kids. The cats taught me that I do not ever want the 20+ year responsibility and expense of taking care of another human being. As low maintenance as cats are – and fortunately I ended up with 2 very healthy and well behaved ones – they still alter my travel plans and detract from the overall personal freedom that I value above anything else in life.
I am eternally grateful that I got them; otherwise, I probably would have ended up having children and would have been absolutely miserable.
amber star says
As someone who has paid off her $15,000 in credit card debt, one of the suggestions listed jumped out at me as being dangerous. One of the biggest factors in digging the debt-hole I was in was my car. As suggested, I purchased a car in cash, and that was a horrible decision for me. The cash I had available wasn’t enough for a decent car, so I ended up with something that I was constantly repairing. Not only was this problematic because I would charge the repair bills to my credit card, it was also problematic because I did not have reliable transportation – I never knew when my car would have a breakdown that would prevent me from getting to work, which is a dangerous situation for someone living paycheck-to-paycheck. For people who need to have their own vehicles, I think it’s important to invest in reliable transportation, even if it means a monthly car payment – at least that’s a predictable expense.
Anthony says
A fantastic article – probably the best I’ve seen on here (which is saying something!)
Anyway the only thing I think missing is the way it is bought. Does it need to be new, or will second hand do? I’m not sure if it is a separate category, but for some things it applies a lot!
Take for example furniture – if you want solid wood, then new prices are very high with used being less than half… that isn’t to say that sometimes you shouldn’t buy new. Technology is the same, and sometimes is only a bit more for new, and factoring in the warranty ends up being better to buy new.
Ron B says
Somehow I wound up with 9 tables (4 end tables, 2 coffee tables, 3 plant stands) in my living/dining area. I’m doing my best to declutter for an eventual downsizing.
I’m now down to one coffee table and one plant stand but I haven’t told you yet about the 2 computer desks in the living room… sigh.
Working my way through my stuff in every room and questioning my reasons for why I bought what I did.
Thanks for the post.
Marya says
Another great post. I was reading an article about the popularity of google glass!!! And just wondering the users pay to look like a clown!!
LILYO says
Sobering questions – especially the ones about pet ownership.
Thank you for the self-analysis.
I check your blog every day – it helps me stay focused, motivated and encouraged.
Andrea says
This is such a wonderful post. Just recently I’ve read something that made me think: “Evaluate all your belongings by asking yourself “Would I buy it again if I had lost it in a fire.”
It’s so simple but true. I’m still trying to evaluate all my material posessions and it’s so liberating.
Eve says
The criteria I’m currently using is, Would I want to haul this with me if I moved overseas? and if not, is it something I would use until the move and buy a replacement for after the move?