Personal Finance Advice

When you go to buy something, do you ever stop to think about why you want to buy it? It’s an obvious answer when you’re buying basic necessities, but what about the items you don’t really need? Why do you want to buy the things you don’t really need?

Are you trying to keep up with the Joneses?

It’s not an easy concept to stop to think about - especially when you’re reaching for a designer label or an expensive electronic gadget - but if you really stop to look at the purchases you make then you might realize that it’s less about what you need and more about what you want based on what the people around you have.

In other words, you’re shopping under the influence.  You’re allowing everyone else to influence you in your purchasing decisions.  Instead of buying things because you need them or because you have decided that you really want them, you’re buying things because your neighbor or coworker has them and that makes you want them too.

It’s a pretty safe assumption to make that this isn’t the best tactic to take when it comes to your purchasing decisions.  When you’re trying to get your personal finances in order, such as paying down debt or building up savings, you’re going to have to switch off the impulse to buy everything the people around you have.  Before you buy something, ask yourself these questions:

1.  Do I really need this?

2.  Can I afford it?

3.  Did I budget for this purchase?

4.  Do I actually want this item?

Of course, you don’t have to go through this internal monologue every time you go to buy a pack of gum.  Instead, run through these questions when you go to buy something that you may suspect you’re buying simply because the people around you have it.  For example, if your friend hosts a barbeque on Saturday and unveils a brand new grill, and then you find yourself standing in the grill section of a department store on Sunday, chances are that this potential grill purchase wasn’t one that you budgeted for at the beginning of the month.  It’s an impulse buy prompted by your friend’s new grill.

You can’t hope to get your personal finances under control if you’re busy trying to keep up with all the eager consumers around you. 

Write a budget and stick to it.  Don’t allow impulse buys to ruin your finances.  Above all, stop trying so hard to get the things that everyone around you has and instead concentrate on your own personal financial situation.