“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.
Elvoz says
Ive yet to meet someone who understands the word “finite” when it comes to time, money, pets and choices. Any minute and dollar spent on one thing cannot be spent on something more important. Kills me to see homeless people with pets or college students with interest bearing loans having babies, beers, and pets
Frankly says
Yeah, those young parents should wait until they’re 50 and paid those loans off…
Rachel says
Another area to consider – magazine subscriptions. It may have already been mentioned. There were too many comments to read every single one. But I know people who subscribe to 5 or 6 or more monthly magazines. Why? You can read most online, and many people don’t really ‘read’ them, they are something to fidget with in between other activities, and they clutter up a room like crazy.
Megan L. says
I just wrote about my 6 steps to curbing impulse buying but this is a more detailed list! Awesome!!
http://meaningfulmommy.wordpress.com/2014/07/06/living-simply-steps-to-curb-impulse-buying/
~Megan
Tom says
Different that clothes, which you covered, I’d like to hear advice on things like fitness equipment and classes/memberships.
Especially considering the horror stories about those gym contracts, people spend tons of money on classes, trainers, packages and supplements to try to get healthy then give it up.
Add in the costs of new workout clothes and shoes or other athletic equipment that ends up collecting dust and becoming a liability as it depreciates almost instantly.
There is entire market designed to seperate you from your money while pretending to get you in shape when most people give up those new hobbies within the first few months. You really need to commit if it’s worth spending the money and devoting your space to equipment or machines.
Love to hear what you think.
Lisa Spoharski Higgins says
As a personal trainer I can tell you a gym is better than buying equipment. I am blessed to work at a gym that is pay as you go/cash membership. There are no contracts and no bank drafts. Remember walking is free and is great exercise.
Sarah says
The folks I know who stay in shape longest often have found an exercise group. There is something inherently motivating about meeting your “peeps” for a workout! You encourage each other and expect to see each other, so you show up! And when you show up, you usually do more as part of a group than you would on your own. -Member of http://www.SealTeamPT.com for eight years!
Joane Duran says
If I want to purchase something that might be considered a luxury item (usually clothing or shoes), and I find myself waffling about the purchase, I’ll tell myself that if I want to spend $25 on something do I have another $25 to put in my savings. If I don’t then I won’t purchase the item.
Kimberley Allan Mulla says
Great list! I would add Beauty/Body Care Products- a huge industry for men and women, mostly geared towards making us feel bad about how we look. And most of which is unnecessary, made unethically, and creates garbage.
Caryl Anne says
Personally, these are great questions to ask oneself because they could help save you time, money, and stress later on no matter what the issue is. Thanks so much for sharing!
bc says
Thanks for the wonderfully useful set of questions. Couple of additions to transportation and housing. For the latter, don’t just consider the cost of the home but also factor in the cost (financial and psychological) of transportation to work, entertainment, etc. Too many Americans go for the seemingly cheaper house in some sprawlburb, then find themselves spending hundreds of dollars (in gas, depreciation, parking, etc) and dozens of hours per month commuting from there to work. It’s why I chose a studio apartment in the city, where I work and go to arts events, readings, etc, instead of a larger place in the suburbs. And speaking of transportation, we’ve been trying to decide whether to trade our beat up 25 year old two seater (which can’t take a bike rack and overheats on long summer drives) for a newer vehicle that can tote our bikes (another transportation option — I ride mine and take public transport to avoid the need for a second car). Then we asked: how many times per year will we actually tote those bikes? So we decided to either rent bikes at the destination or rent a vehicle for those sporadic trips. By the way, I’ve read that the average total cost of ownership of a car in America, including parking, gas, depreciation, insurance, repairs, etc. etc. is around $8000/per year. Thanks again for this always helpful blog!
Jeremy says
I’m a devorced 30 something and I have one dog. I’ve had fish, goats, chickens and a whole host of different animals… But looking back I can’t help but ask “what was the cost vs benefit”? Having more than one pet would be too much for me these days and as much as I love salt water reef tanks I wouldn’t want the expense or the ” anchor ” it creates. My dog is highly mobile, just like I want to be… So, perhaps a cost vs benefit and lifestyle fit should be considered with pets. Just my 2¢.
Alumina says
I think the only way to be minimalist in skin care and cosmetics is to have perfect skin in the first place! Having hormonal acne and eczema, I was not lucky in the genetics department. Having acne on your face, chest and back is embarassing. My eczema causes my hands and legs to itch, crack and flake if I don’t keep up with lotion and exfoliation!
Daniele says
Alumina, I had the exact some problems as you. Finally in my 40’s I found a solution. I cut out coffee and within a week my skin improved greatly. For even better results I need to minimise wheat. I also use coconut oil and apricot kernel oil for the eczema. Only wish I’d done this 20 years ago…would’ve saved me so much stress and money.
Hope this helps you too.