making money decisions is challenging. Picture of sign post pointing in multiple directions. — *Image:* *@soymeraki* *on Unsplash*

Do you find that you need to stop spending money? One of the hardest things when it comes to personal finance is figuring out if you should or should not buy something. How do you know if you can afford it? How do you know if it is worth it or not?

Every day, each of us is faced with financial decisions about where our money should go, and it’s exhausting to have to think about it all the time. Most of us just end up making decisions on the fly, often defaulting to just purchasing the item whether or not you know if you can afford it.

As a financial coach, I never see it as my job to tell you how to spend your money. Rather, I help my clients learn how to think about the process of making their own spending decisions. When you have a set of questions you can ask to evaluate purchases, you can make the decision much more confidently with less risk of feeling guilty or ashamed.

It may take practice to get into the habit of asking these questions, but it will get easier the more you do it. As you read through these, you can think about something you’re considering purchasing, or about something you’ve purchased in your past. Reflect on the answers without judging yourself for past behavior (it’s hard, I know).

Questions to Ask Yourself Before Making a Purchase

(These questions are designed for more major purchases. You don’t need to ask them every time you buy a $4 item at Target.)

1. Is this something I really need or want?

It’s perfectly fine to buy things that you just want. In fact, I encourage you to include space in your budget for things that bring you joy or make your life better. But most of us are guilty of buying things that catch our eye that we don’t really need or even want that much.

Think of all the things you have sitting around your house that you thought you wanted, but have now been stashed in a closet or piled up in the basement. If you went back in time, would you have purchased those items?

When you want to buy something, try imagining how you’ll feel about owning it three years from now. Will you be glad to have purchased it?

2. Would I have wanted this if I hadn’t seen an advertisement for it?

Recently, Target had SodaStreams on sale for 40% off with an extra canister. Even though I had never thought about getting a SodaStream before, I suddenly found myself thinking about how much more sparkling water I could be drinking, the cans and bottles I wouldn’t need to purchase and recycle, and how I wouldn’t have to worry about Target never having Club Soda in stock. It was tempting, for sure. But the truth is that I was only tempted because I saw that it was on sale, and only on sale for one day.

3. What are the downsides of purchasing this item?

When it comes to the SodaStream, the negative consequences of owning it were part of what made me decide not to do it. I thought about how I’d have to find a place to put it in my small, old home kitchen, and that I’d have to deal with replacement cylinders.

4. Do the benefits outweigh the downsides?

For me, the idea of having to find replacement cylinders is incredibly annoying and I really don’t have space to store more kitchen items. Plus, my family does not drink that many sparkling beverages, so the benefits weren’t overwhelming.

But for a family that drinks a lot of sparkling beverages, has space, and doesn’t mind getting replacement cylinders, the SodaStream might be worth it, particularly if it is on sale.

5. Do I have something else that would fill the need or desire of the item being considered?

Many of us see things that we think we need/want and forget about all of the things we already have that could fill that role.

For example, maybe you’re feeling like you need to refresh your home decor. Instead of going shopping right away, try making things feel new by moving things around. Or, most of us have piles of things we bought in the past and put into storage when we got tired of them. Can you bring any of those items back to provide a fresh look?

6. Do I have the money to pay for this right now?

And no, I don’t mean just putting it on a credit card. If you don’t have money in your bank account right now to pay for this item (and all of the other things you need/want to purchase), you should not be buying it.

The only exceptions to this rule would be things related to survival, such as medical care, medications, food, etc. In this case, putting it on a credit card that you can’t pay off immediately isn’t ideal, but might be necessary. To avoid that situation, you’ll want to start building an emergency fund so you can pay for these things if they arise in the future.

If you need help getting control of your money and building a system so that you can confidently know if you can afford something, consider working with a financial coach to design a money plan that works for you.

7. Does this item contribute to my values and my idea of a rich life?

Managing money often involves making choices. When you align your money with your values by spending on things that are important to you and cutting out the things that aren’t, you will experience greater life satisfaction.

You can still sometimes buy things that aren’t part of your rich life vision, but you need to plan for them and understand what you are giving up in order to buy that item.

For example, since some finance gurus like to rip on lattes, let’s say that you get a daily coffee on your way to work. If you have decided that the lattes make going to work a little bit more bearable or even enjoyable, then you should absolutely buy them if you have the money to do so.

But you also have to ask yourself: what am I giving up in order to buy these lattes?

If you assume a daily latte on work days (M-F) at $5 each, that adds up to $1300 per year. This isn’t an insignificant amount, and could make a difference for someone not earning a lot who isn’t saving for retirement or is in a lot of debt.

Or, it might be enough to pay for an extra day of vacation, a nicer hotel, or some extra meals out or activities.

If you have the money to pay for your lattes and there’s nothing else you’d rather be doing with the money, then by all means, enjoy your lattes!

But it’s always worth considering if what you currently buy means that you’re giving up something that is more important to you. Maybe it is and maybe it isn’t, but at least you know you’re making an intentional decision that is right for you.

It’s about being intentional.

The answers to all of these questions may still lead you to say yes to a purchase. That’s okay! It’s even great! You should be able to use your money in ways that are fun, increase enjoyment, or just make your life better. It’s important to be responsible and take care of yourself now and in the future, but money is also supposed to be fun.

So buying things is not inherently bad all of the time. These questions are designed to help you make more intentional decisions about how you spend your money so that you don’t end up feeling guilty and ashamed, and instead can feel confident that you made the right decision for you.

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