Have you ever shopped in-store or online, saw something that caught your eye, and thought you needed to buy it? Before you make the purchase, follow these steps to be sure you’re making a decision that fits within your budget.
1. Wait it out to see if you’re still interested in making the purchase.
A want might seem like a must-have, but the urgency can fade when you wait it out. Take a break for a few days before finalizing a big purchase to see if it’s still on your mind and you really want it. Wait an entire week or even a month for a more significant purchase. After some time has passed, you may find you don’t want the item after all. While waiting, this also allows you to set aside money for the item or put it towards other goals you’re working on through your journey to Financial Freedom.
2. Consider the emotions that drive the buying decision.
It’s easy to indulge in retail therapy or reward yourself for your hard work, but it’s essential to think of the emotions behind every swipe of your card or cash pulled out of your wallet. Since this can add up quickly, consider activities that you already have that don’t take a hit on your budget. This can be anything like getting crafty with a DIY project, watching your favorite movie, baking cookies for a neighbor, or living generously by volunteering at a local organization. These activities can give you peace of mind without the emotional push to shop.
3. Review your upcoming expenses.
When reviewing your budget, consider the following questions:
Have you saved $1,000 for emergencies?
Did you pay off all debt, including your car loan?
Do you have enough savings to cover 3 to 6 months of expenses?
Have you saved enough for significant expenses you’re planning for in the future, like a wedding or buying a house?
If your response is no to any of the above questions, this is the perfect time to achieve several of these Money Milestones. By taking your future financial needs into account, you’ll avoid spending money today that you’ll need for tomorrow.
4. Find opportunities to save more.
This can be anything from grabbing coupons to using apps that help you find an item at the best price. Another solution is buying second-hand from your local thrift store or online shopping options like Facebook Marketplace, Craigslist, or eBay. It’s also worth the wait to snag savings during sales that occur on a rolling basis, including during the holidays.
Being intentional about the small amounts you can save will make a big difference when you’re ready to make a large purchase. Make it easier to see these small changes by using a free budgeting tool, like Goals and Budgets, to help you keep track of your progress alongside your financial freedom plan.
5. Pay for your purchases in full (or in cash).
We recommend paying for items in cash or swiping your debit card that links with your FAIRWINDS Spending or Checking Account. If you can’t pay for the item in full, save enough in a designated savings account to pay for your purchase in cash to avoid paying high-interest rates or going back into debt. After opening a savings account, consider giving it a name to help visualize what you’re working towards.
Following this five-step outline is critical to keeping your budget financially fit. Keep the outline top of mind before filling your shopping cart online or in-store, and seize opportunities to use the funds you would have spent on a large purchase to reach financial freedom faster.