Before you buy: Stop, drop and think
Asking yourself a series of questions before you make a purchase can lead to wiser buying behaviors.
Picture being at the store and having a brand new item that you are interested in purchasing. Do you buy it or not? Everyone has been in this situation before. The situation can extend to any purchase whether it is online, in a store, or even a major purchase decision such as a home or car.
The National Endowment for Financial Education High School Financial Planning Program provides a great list of questions to help consumers think through purchases. This is a great tool Michigan State university Extension recommends, for anyone at any age considering spending money.
The “Stop, Drop, and Think Before You Buy Test” is a series of questions to ask yourself before the purchase is made. Questions asked are:
- Do I need this or do I want this?
- If I don’t need this, why do I want this?
- Exactly when will I use (or wear) it?
- Can I find it for less somewhere else?
- What will I have to give up or put off by buying this now?
These questions help you, as a consumer, consider all the variables that relate to making a purchase. Looking at whether the purchase is truly a need or if it is more of a want, is the key to understanding motivation behind your purchase. If you leave now and do not purchase, will you be aware of not having that purchase a week or two in the future? Sometimes the excitement of the potential purchase is greater than the actual need for the item.
Being a savvy shopper and doing price comparison can also help with smart shopping decisions. There are many online and smart-phone applications to assist with that research process, as well, but even calling or going to a variety of stores before you buy can provide that crucial information to save you money.
Knowing the “opportunity cost,” or the things that will have to be given up or put off by making the purchase, is important in understanding that financial decisions now impact other financial decisions in the future. This is not always an easy or comfortable idea to live with but is the reality with finite resources such as time or money. Consider that a weekend vacation might mean that a purchase of a new dishwasher can’t happen even if the current dishwasher breaks down. The opportunity to purchase a new dishwasher is foregone in place of the opportunity for the vacation. This is a personal choice but, in this case, might mean hand-washing those dishes for awhile.
Shopping is a decision-making process and analyzing these factors can help you make the best decisions for your financial situation.
More information from Michigan State University Extension on money management topics can be found on the Michigan State University Extension 4-H website and on the MIMoneyHealth website. More information and ordering instructions on the National Endowment for Financial Education High School Financial Planning Program can be found at the HSFPP website.