To buy or not to buy? Every day, many of us find that this is, indeed, the question. But few of us have established consistent, go-to methods or criteria for answering that question. So why is it important to develop some such criteria? For a few reasons.

Conscious Decision-Making

Let’s say you need a new car and you’ve been saving money, so you won’t need to take out a car loan. You have enough money to buy a snazzy model with neat accessories, but should you go for it when a less-showy car would save you a couple thousand dollars?

Or, to use an example more familiar to many of us: you got fifty dollars for your birthday from a family member, which you weren’t expecting. You need a new coffee maker and were going to buy a simple one with money you’d saved. Should you splurge on a fancier model with the “found” birthday cash?

Laying the Groundwork

While these decisions may seem like no-brainers, they are actually excellent opportunities for practicing conscious decision-making. This post from GetRichSlowly.org offers a handy “Should I Buy It” flowchart, which covers these questions:

• Can I afford it? This is a good place to start. If you can’t afford something, the flowchart says, you shouldn’t buy it. Case closed. Notice that it doesn’t ask if you could afford it with an extended financing plan or a higher-interest loan.
• Is it something I need or lack? If you can afford something, the flowchart doesn’t point to “buy” immediately. If you answer “no” to this question, the flowchart says you shouldn’t buy it.
• Is there a cheaper option? Ah-ha. Here’s an important part. If you answered “yes” to the above question, this is the reality check. If you could save some money by choosing a baseline model (consider the hypothetical scenarios above), now’s the time to do so.
• Is the cheaper option high-quality? This is an important consideration, too: if you want that car or coffee maker to last, it may be wise to get a slightly more expensive model if you’re paying for quality. But if the inflated price is all extras (think espresso or steamed milk options), it may not be such a good idea.
• Is quality important? If you answered “no” to the above question, it’s important to consider this before dropping more money than you need to. How much do you really need that quilted layer on your toilet paper?

Remember: when spending money, a little preparation is worth a lot of perspiration.

Additional Resources

66 Ways to Save Money (PDF)

What Causes Customers to Buy on Impulse? (PDF)