Ask Yourself This One Question to Cut Back on Spending

Every day, marketers wear at our resolve.  You may resolve to be smart with your money, but then you see the latest gizmo, and you decide it would make your life so much easier.  Then you use it once or twice, and after that it sits in a cupboard.

Or, you check out your favorite store and see a big sale.  How can you resist?  You snatch up several pieces because they’re such a good buy, but then 6 months later, many of the pieces are still in your closet with the tags on.

Sound familiar?

Despite our best intentions, we’re often seduced by marketing and spend hard earned money on items that we really don’t need (or even want after they’re in our home).

There’s a simple trick to resist the marketing.

Before you purchase something, ask yourself, would I still want this item if I lost my job tomorrow?

If you’re at the grocery store, chances are the you wouldn’t regret buying the food that you bought.  You may regret buying the magazine from the checkout line while you were waiting or the toy your child begged for.

If you’re clothes shopping, you might not regret the first two new outfits you bought for a new season, but you’d likely regret the other additional eight outfits you bought on the same day.

If you lose your job tomorrow, two new outfits might be necessary to help in the job search, but you don’t need oodles of clothes.

Yes, this strategy really helps you determine what is a need and what is a want.

So why not just ask yourself the old question, “Do I need this, or do I want this?”

The problem with this simple question is that we’re no longer good at distinguishing needs from wants.  Most people would now say that Internet access is a necessity.  I’d agree, if you work online.  However, if you don’t, you can still get internet access at coffee shops, the library, schools.

Is not having internet access inconvenient?  Sure.  But internet access in your home is not a necessity.

Of course, you don’t want to cut out every item that you spend money on.  However, if you’re money is very tight, or if you’re trying to pay down debt, it’s important to ask yourself if your spending is going overboard.  Would you regret your purchase if you lost your job tomorrow?  If the answer is yes, then maybe you shouldn’t buy it.

Learning to be a prudent shopper and resisting the siren call of the marketers is essential to getting ahead financially.   In the beginning, the extra money you keep in your pocket can help you pay off debt or start an emergency fund.

Later, that extra money can help you save more for retirement.  You may not think saving an extra $1,000 or $2,000 a year for retirement makes a big difference, but with compounding interest and years of saving, it can mean the difference in tens if not hundreds of thousands of dollars in your nest egg.

You don’t have to be stingy and never spend anything for fun, but you should carefully decide on your own what you would like to purchase, rather than being seduced by marketers.