Spending -Image by gonghuimin468 from Pixabay
Money Management,  Money Mindset,  Spending

Spending Money – 8 Things to Consider Before Making a Purchase

Think before you act.

We’ve all heard that phrase at least once in our lives. Apply that to personal finance and it means being aware of how you’re spending your hard earned money. Below are a list of 8 things you should stop and think about before making a purchase.

1. Are your emotions or mood influencing your decisions?

Emotions guide many of the decisions we make throughout our day. Maybe you’re an emotional spender. Take a moment and ask yourself: “What emotion am I feeling right now?”

Are you feeling happy and loving life? “Let’s keep the good time rolling!”  

Or maybe you’re feeling a bit down?  “Buying a video game or shopping for new clothes always helps to take my mind away from what troubles me.” 

Boil it down and ask yourself how you’re feeling at that moment.  You may be surprised to find out how your mood influences your spending habits.

2. Want vs. need

You see a cute pair of boots that you want. Now ask yourself: “Do I really need another pair of boots?”  It’s a hard question to ask, but necessary.  You can only wear a pair at a time and you already have other shoes. Will you be burdened or feel pain if you don’t buy them? Maybe, maybe not.  Only you can answer that question.

On the flip side, be sure to make room in your life and budget for some “wants.” A life based purely on necessity is not an enjoyable way to live.

For a more in depth look at distinguishing between needs vs wants check out: Needs Vs Wants

3. Money = Time

“How many hours did I have to work to pay for this purchase?” Asking this question to myself really helps put things into perspective.

You want a new phone to replace the one you bought last year. Take the purchase price and divide your hourly wage into that to get the amount of hours you will have worked to get the new phone. Is it worth it? Do you need a new phone or do you just want a new phone? 

Another angle to consider, do you really want to buy that $75 bottle of wine when you know that it won’t last as long as you need it to based on the price you have to pay? Could a $5.00 bottle of wine do instead? Those are things to consider!

In a recent episode of the Afford Anything Podcast, host Paula Pant was speaking to world traveler and writer, Matt Kepnes aka, Nomadic Matt. He explained his view on spending money like this:

Frame your spending in terms of time.

Those $36 pair of sunglasses at REI? That costs one day of your life in Medellin. It’s one day of everything: your accommodation, food, coffee, transit, everything.

Can you forgo those sunglasses and spend an extra day in Medellin?

You can listen to the full podcast here.

4. Can I afford it?

Do I have the money in my account to cover the complete cost of the purchase? Access to credit cards doesn’t count.  Seems like common sense, but some people don’t honestly know the balance in their account. If you don’t have the money, you should not buy it.

5. Where else could/should I use this money?

Do you have monthly required bills such as utilities, rent, mortgage, insurance?  Make certain those bills are paid first before buying any other fun non-essential items!

Are you in debt? Then you most certainly should not be spending money on items you don’t need. If you are already in debt, all purchases you make push you further into debt!

6. Can I borrow this item from someone else instead of buy it?

Single-use items, such as tools, can be one of the biggest wastes of money. Does it make sense to buy that power drill and accessories to make a couple of holes, knowing you have never needed a drill up until this point and will likely not need one ever again?  Reach out to friends, family, and neighbors and see if anyone has one that you can borrow or rent for the day instead of purchasing something that will go into storage once you’re done with it.

If you do have to buy an item for whatever reason, can you buy it second hand?

7. Could I save money by buying this elsewhere?

These days we have so many shopping options. Refuse to settle for the first price you see.  Shop around, pull out your phone or laptop and price compare. Challenge yourself to find the item cheaper elsewhere. Consider buying used or refurbished. Save that money!

8. Sleep on it.

We often get caught in the moment when we find something that excites us. All reasoning goes out the window and all we can think about is how great it would be to possess the item. At this moment, walk away. Give it a couple of days. Often when I wait it out I determine I could get by with less and that money goes towards something more important like reducing debt, putting it in savings, or investing it!

These 8 things can help you a lot!

By asking a few of these harder questions, you become more self aware and figure out if the money you’re spending is based on a need, a want, or out of habit. You are in charge of yourself, your money, and how you spend it.

I hope these point help you save some money next time you're considering a purchase.


Print out the card below and carry it in your wallet as a reminder!

Pin this:

Spending Money

Finance Coach, Foodie, Writer and Traveler. When he is not working, he travels(top of the list is Europe) in search of amazing history and to gorge himself on bread products.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.