Whether money is tight right now or you have more than enough to cover your expenses, it’s always a good idea to be frugal with your income in order to be prepared for unexpected circumstances that might stretch you a bit. One thing you can work on to help with this preparation, regardless of your current financial situation, is to understand how you can personally determine whether a purchase is worth it’s price to you. To help you figure out this threshold, here are three things to consider before making any purchases.
Know Your Financial Weaknesses
Almost everyone has some kind of financial weakness. While some might have a more pronounced weakness than others, it’s still a smart idea to know what your personal financial weakness is so you can recognize situations that you might be vulnerable to.
According to Paula Pant, a contributor to AOL.com, some common financial weaknesses include making impulse buys, having “analysis paralysis”, and being too susceptible to sales and discounts. By acknowledging what your financial weakness is, whatever that may be, you can hopefully withstand that financial temptation in the future and only make purchases that are worth your while.
Ask Yourself The Right Questions Beforehand
When you’re contemplating making a purchase, there are a few questions you can ask yourself to help realize if the purchase you’re making is both reasonable and financially sound. Miranda Marquit, a contributor to CashMoneyLife.com, shares that a few of the questions you should be able to answer before buying something are can afford it, will it make your life better or easier, and will you have to give up something else you need in order to make this purchase possible. If you’re unhappy with any of the answers to these questions, this purchase may not be worth it to you.
Determining Value to You
Determining if something is of substantial value is a very personal decision. This is especially the case when it comes to how much to pay for a product or service. According to a study reported on by Carmen Nobel, a contributor to Harvard Business School, when people were able to know the price before knowing what the corresponding product was, they were much more likely to question if the product was worth it as opposed to when they saw the product first. Knowing this, it may be helpful for you to decide if something is worth its sticker price by focusing on the price before picking a specific brand of product.
If you can decide beforehand what your top dollar is for certain purchases you plan to make, you could have a lot more control over your spending. Use the tips mentioned above to make this process a simpler one.