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How to Talk Yourself Out of Buying and Spending?

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).
  • Mysti - I just spend a week with the I Want Its. I ultimately powered through. :) If you want to read about it….come check out my blog. ReplyCancel

  • Allison - The first one (hours worked) technique works VERY well for me– especially when you make 7.50/hr and hate your job! It even prevented me from going out to lunch while at work. (Gee, with this lunch I will have just worked the last hour for free!?) Thankfully I have left the summer job behind to go back to school. Academia is a breeze compared to a job in the service sector!

    Love your blog very much, good guidance for someone who feels financial burdens beyond my years early in life. ReplyCancel

  • Money Reasons - Those steps you identified above are the exact steps that I go through.

    For example, I don't have an IPod (I know I'm not cool…), but I do have a $30 equivalent! In fact, I don't even really have a cell phone of my own (the blackberry I have is really the property of the company that I work at!), but I'm more than glad to use it :)

    Great list!!! ReplyCancel

  • Money Weekly Cache 2010, July 25 | Money Reasons - [...] Heeled Blog:  How to Talk Yourself Out of Buying and Spending?  Well Heeled did an excellent job of summerizing the exact steps I go through to minimize my [...]ReplyCancel

  • Emma - I went through this and decided I still wanted it! It was two days worth of work, but I have my new waterproof camera! I DID wait for two weeks before buying it though, having found it for a reasonable price and then started the research and checked the reviews of it.

    This also means that I can pass my other digital camera onto my parents, who have been discussing wanting a digital camera. Did I REALLY need it? Well, not really, since I already have a camera, but when summer hits, I buy the disposable cameras anyways so that I can bring it to the pool/beach/vacation, and then I still have to develop the photos, and scan the ones I want, and getting a digital camera that's waterproof over the long term does save me some money, but certainly not initially.

    This purchase was more of a want vs a need, but I'm still happy with it! Plus, when I see my mom next week, I can suprise her with a new (to her) camera! ReplyCancel

  • Samurai - Another good one is to calculate what you have to make in GROSS INCOME.

    $70,000 car costs me about $110,000 in gross income due to taxes. Ouch! ReplyCancel

  • Benjamin Bankruptcy - I like the hours of work after tax to buy it BUT i don't think it acurately reflects how long it would take for you to "afford it". Your "real hourly wage" shoul be:

    net income – expenses (rent/mortgage, insurance, food, clothing etc) – retirement contribution = disposable income

    disposable income/hours worked = "real hourly wage"

    It's actually the money you have left over after paying for food, accomodation, health insurance, that you have available to spend. It might take you 3 months of working to save up for that "widget" ReplyCancel

  • Reasonable - I also use the Don't-Touch-It method. After you pick something up you are more likely to buy it. ReplyCancel

  • Denise - Great list! Thanks so much for sharing. I'll go with #1! ReplyCancel

  • How To Talk Yourself Out Of Unnecessary Buys : Real-Time Finance - [...] Here is some of the best advice from the post: [...]ReplyCancel

  • martianmelaine - wow really informative, linkin back to the blog ReplyCancel

  • Carolyn - This is EXACTLY what I needed to read right now. Merci, sweets. :) ReplyCancel

  • youngandthrifty - Great tips- it helps you rethink about your pending purchase and not automatically go into "I WANT IT NOOOOOOWWW NOWWWWW!!" mode.

    I sometimes get into that mode, and tell myself to walk away from it, ask the sales person to hold it, and come back if I really want it, in an hour. I suppose I'm referring to a recent walk-away from a BCBG dress that was so discounted I almost had to have it. =) ReplyCancel

  • Link love (Powered by couscous and waffle cardigans) « Musings of an Abstract Aucklander - [...] And finally, Well Heeled offers some suggestions for talking yourself out of spending. [...]ReplyCancel

  • Ruby Clifton - There are some people who are impulsive buyers. They really need to restrain themselves. ReplyCancel

  • Weekend Personal Finance Links - [...] Well-Heeled Blog posts on how to talk yourself out of buying and spending. [...]ReplyCancel

  • Thousand Pennies - I loved this post! I linked to it and elaborated on it on my blog at athousandpenniesaday.blogspot.com ReplyCancel

  • First Money Saving Post This Year - My Money Mess – My Money Mess - [...] How to Talk Yourself Out of Buying and Spending? is a similar article from the archives at Well Heeled Blog. Again, do what works for you. [...]ReplyCancel

  • Unsubscribe From Store Emails, Save Money | Well Heeled Blog - [...] you need help unsubscribing from store emails, read this list of how to talk yourself out of shopping, then go visit the ERE blog. I don’t agree with everything that Jacob says (he really is too [...]ReplyCancel

  • Ann - This is a fabulous list. Great reminders! ReplyCancel

  • P.E.P for Week of July 26- July 30, 2010 | Prairie Eco-Thrifter - [...] From My Debt- an inspiring post which reflects true honesty of one’s self. (@liverealnow)How to Talk Yourself Out of Buying or Spending-7 great questions to ask before you make that purchase. (@wellheeledblog)Some Green Energy Tax [...]ReplyCancel

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