Making the decision to spend your hard-earned cash should be worthy of more than just a passing thought — especially when it comes to big purchases. And yet, people make impulse purchases every day, whether it’s a cute blouse, the latest smartphone or even a new car. Often driven by instant gratification or the subconscious (or conscious) desire to impress others, these purchases can be damaging to your overall financial health if you’re not in the right place to make them.
Learning to take a step back and reflect before making a big purchase is essential to getting ahead financially and not saddling yourself with debt or furthering negative patterns of behavior. But how can you go about changing these behaviors, especially if shopping in this way is something you’ve been doing for a long time?
To start, ask yourself the following six questions, as recommended by the financial leaders of Kiplinger Advisor Collective. Below, they explain why these particular questions are so vital to ask before making a major purchase and how they can help you make better buying decisions in the future.
At what cost?
“‘At what cost?’ is a question that cuts through the noise and gets to the heart of the matter. Your decision to buy something pricey is not just about the money; it's about everything else — what you're giving up, what you're getting, what you're risking, how you're feeling and who you are. Asking yourself, ‘At what cost?’ reveals the true nature of your decision and the trade-offs it leads to. It is a way to be honest and accountable to yourself and your values while resisting the seductive nature of consumer culture.” — Kiersten Saunders, rich & REGULAR
Is this a need or a want?
“One of the most important questions to consider is whether the purchase is a need or a want. The next question is to think about how you will pay for this major purchase and the impact it could have on your overall goals and objectives. It is important to align your priorities and passions with your purchase decisions.” — Marguerita Cheng, Blue Ocean Global Wealth
Does this align with my aspirational plan?
“It's essential to permit yourself to make a major financial purchase. Ask yourself, ‘Does this purchase align with our aspirational life and financial plan?’ If you adhere to your financial plan, and the purchase increases your well-being, you invest in your current and future self. Your alignment question helps audit your purchase.” — Dr. Preston D. Cherry, Concurrent Financial Planning
Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives. Learn more >
Can my money be better used elsewhere?
“Do I really need this? Can my money be better used elsewhere? The reason you should ask this is that it helps you take a step back and look at the bigger picture as opposed to responding to a more emotional impulse type of situation.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management
Why is this important to me?
“One question to ask yourself before making a major financial purchase or decision is, ‘Why is this important to me?’ Honestly answering this question will help you think beyond societal norms, others’ opinions and instant gratification to better understand the true value of the purchase or financial decision to you personally. Taking the time to peel back the layers of what you are hoping to gain provides perspective about whether it is worth it to you and really something you want.” — Chianté Jones, Dollars and Change
What value am I getting from this purchase?
“Determining if the major financial purchase is aligned with, will help achieve or is a distraction from your goals are good base-level steps to take. The deeper-level questions are: What value is this purchase providing, how will it make me feel and what ‘return on investment’ is the purchase bringing or adding to my life? Ultimately, is the investment ‘worth it’ for you and your family?” — Lyndsey Monahan, Women Inspire Wealth
