“Do you really need this item and do you need it now?” – this is a question that you need to ask when making purchases if you are on a tight budget. When you are on a tight budget, every penny counts so you have to be vigilant with your purchases and saving.
One of the base things that you have to do for your finances to be balanced is to make mindful decisions about how you spend your money. What happens more often than not is that we just spend money without stopping to think if we really need the item we are purchasing. This usually happens with people who have just started earning. Just having the money for buying something isn’t always a good reason to make a purchase, this is how you fall into debt over time.
Let’s divide the question we are talking about into two parts and look at them closely.
Do You Really Need This Item?
This question should be the base reasoning for every purchase you make because it helps you really think about whether you need the item. We often confuse the things that we simply want or something that is a luxury purchase.
If it is a luxury purchase, then be sure that you can afford it and that you can pay cash for it – the cash part is just to ensure that you don’t use your credit card and go in debt or use your debit card to tap into your emergency fund.
For example, if you have to constantly keep repairing your car, then it might be time to purchase a new one. Spending a lot on repairs doesn’t make sense so that answers your “why” as well, here. But, needing a car does not mean that you need a BMW. Even when you need something, you have to be aware of how it fits in your budget.
If it is a true need, then there’s something else you need to consider, you need to determine why you need it and when. We have already talked about the “why”, let’s talk about the “when.”
Do You Need It Right Now?
Now that you have determined that you need the item, you need to make sure that you need it right now. This is especially necessary if you do not currently have the cash for it, because like I mentioned earlier, we do not want to use credit or debit cards of we can’t actually afford it.
If it is a big purchase and will likely put a strain on your pocket, then you have to find out if there is a way you can do without the item for a short time.
For example, if your washing machine stopped working and you live alone, then the expense of a new machine can be a lot to spend. So, you can either hand wash your clothes or use your local laundromat while you save up for a new machine.
You can also check if you can borrow the item from a friend or family member while you are saving up to purchase one of your own. You can also set up a sinking fund to help you save up the costs.
When you are on a budget, saving isn’t the only goal. Knowing how to manage big purchases is also something that needs some thought to be put into. Use these two questions to base even the thought of the purchase off of.