10 Questions to Ponder Before You Buy Something

1. Can I afford it?

First and foremost you should check with your budget. Some people (my former self included) believe that if you have the credit line for it, then you can afford it. Wrong. You cannot afford it unless the money is sitting in your bank account and your bills are already accounted for! Then again you can always e-mail Suze Orman and ask her what she thinks.

2. Do I need it?

There are some things in life that you cannot go without: food, water, shelter, clothing. Do we need to eat filet mignon and drink Starbucks coffee? No. Do we need to wear fancy designer labels? Negative. Do we need a glamorous chateau with a moat and 16 bedrooms? Yes. Ok fine, no. The point is not that we can’t indulge ourselves from time to time, but that we should be able to distinguish between needs and desires to make wise choices.

3. How often will I use it?

Sometimes breaking it down into a per use cost can give some perspective. For example, if I determine that I will wear a pair of $50 shoes 3 times a week for a year my per use cost of those shoes would be $0.32. Not a bad deal. However, if I was only going to wear those shoes once to a party, my per use cost rises dramatically to $50, and they don't seem like such a good deal anymore.

4. Can I find it cheaper?

First, you should always compare prices using one of the many price search engines on the internet.

If you're out and about shopping and don't have access to the internet you can use Frucall to check prices from your phone. This service allows you to check prices from your phone by either texting or calling them with the bar code. I haven’t tried it but it seems that it would be pretty handy!

Don’t forget to check forums like Fatwallet and Slickdeal to see if coupons are available.

5. Would it be more economical to rent or borrow it?

It just doesn’t make sense to purchase some things either because a) the per use cost doesn’t justify it or b) there is a good supply of items you can easily borrow for free or at a low cost.

Books and movies are a good example of something you should never buy. Between the library, book trading sites, and Netflix you should be able to find what you need.

Other less obvious things that you should think about borrowing instead of buying are sporting equipment and cooking supplies. I always have good intentions of playing tennis frequently, but the reality is that I have only played tennis a handful of times in the past year. It makes more sense for me to borrow someone else's racket instead of buying my own. Along the same line, I may think baking my own bread sounds like a fun idea, but I'll never do it enough to justify buying a bread maker. It's probably a better idea to borrow one from my Betty Crocker neighbor.

6. Can I earn points for my purchase?

Make sure to check sites like Mypoints or Ebates to see if you can earn points or cash back for your purchases.

7. Do I already have something that can do the same or similar job?

Sometimes, if we are resourceful, we can find ways to make the things lying around our house work for us.

For example, now that it's springtime I wanted to plant a garden. The only problem was that I had vowed to not buy anything new for 100 days. I needed pots because my dogs love to trample itty bitty baby plants. I was in quite a conundrum until I realized that we had some old buckets lying around that would do the job. All I had to do was poke some holes in the bottom for drainage and I had some nice planters for my vegetables.

The moral of this story is is that sometimes we already have what we need, we just need to be creative to see it.

8. Can I wait?

They say that patience is a virtue. Why? Because it can save you money! By waiting you are increasing your chances that the item you are coveting will go on sale. This is especially true with electronics. You pay a premium for being an "early adopter." Some people call this the "stupid tax." Think of all those poor people who bought the iPhone when it was first released, only to have the price drop $200 2 months after the release.

9. Have I picked the right product?

Make sure you are getting a quality product with the right features for YOU by checking customer reviews from sites like Epinions and Amazon.

10. How should I pay?

If after asking yourself questions #1-9 and you still think you need this product (really?) you should consider your payment options. Many credit card companies offer cash back or rewards for money that you spend with their card. Make sure that the rewards you are earning with your credit/debit card best matches your lifestyle and spending patterns. Most importantly, if you are already carrying a balance on your credit card, you should not be adding more no matter how good the rewards are! Consider paying cash instead.

Asking these questions has prevented me from making many purchases and probably saved me thousands of dollars. I hope you find them useful too!