It seems that I’ve come down with a case of I-want-buy-itis lately. Even though our economy has been hampered by the lack of consumer demand, this consumer isn’t quite ready to loosen her purse strings yet. Unfortunately, it appears that retailers are doing a very good job of turning out products that I want. So here are some things I’ve thought of to talk myself out of shopping, and instead put the money towards saving.
Here are a few ways what I’ve come up with… what are your methods to talk yourself out of shopping?
- The Hours Worked Required Formula: How many hours of after-tax income would it take you to make the money needed to purchase XYZ? If you make $40 per hour, then your take-home pay is probably around $30 per hour. A $3,000 couch will cost you 100 hours (or ~12 8-hour days) to pay off.
- The Wait-Period: Self-impose a 24-hour wait before you purchase anything over $100. More stringent followers of this method might impose an additional 24-hour wait for every $100. If a purchase costs $200, then you would wait a full 48 hours before you buy it. A $300 purchase would require 72 hours of wait time.
- The Compounding Interest Calculation: Figure out the return you can get from the money that you don’t spend and invest instead. This works best for large-ticket items (think over $10,000), because I don’t find any motivational value from knowing that the $10 I spend on dinner tonight could grow into $43 in 30 years.
- The Look in Your Heart and Ask Do I REALLY Need It: This only works when you are clear-headed and honest with yourself, not when you are so head over heels for that new coupe or iPad or sheath dress from Theory.
- The Do I Have Something Similar Comparison: This works well for electronic gadgets and clothes / shoes. If you have an iPhone, a netbook, a Kindle, and a laptop, then maybe you don’t need an iPad right this moment. Just maybe. Or, if you have three black pencil skirts, then it’s probably not a necessity to get a fourth black pencil skirt. Even if it’s got a different waist band than the other three.
- The Regret Factor: Will you regret this purchase in the morning? If you will feel worse about spending $$$ on an impulse buy in the morning than you do now, don’t buy it. Or at the very least, keep the receipt so you can return it.
- The Big Goal Factor: Can the money be better spent on one of your financial goals such as retirement, mortgage, college, etc? Maybe thinking of your 401K contributions might just be what stops you from swiping your credit card for the lovely, chocolate-brown pebbled leather bowler bag on Gilt (not that I am speaking from experience here. Not at all).