When it comes to making purchases, many of us are guilty of buying things that we don’t really want, don’t really need, or won’t really use. It’s easy to let your closet grow so much that you couldn’t possibly wear everything in a year, or let your DVD collection balloon for no reason other than it’s convenient to own dozens of your favorite movies. But when you think about it, there’s no good reason to have a closet that could clothe half of New York City or a DVD collection to rival Blockbuster. If you’re struggling to maintain control of your spending, or you find every time you clean out your closet your Goodwill pile grows by an order of magnitude, the following tips are for you.
- Before buying, ask yourself the following questions:
- Is the item is necessary? Do you need it? Like really, really need it?
- Can you afford it? Will you have to rearrange your budget or give something else up to pay for it? Everything you buy comes at a cost, unless you have an unlimited income (in which case, what’s your secret?). By buying this item, what will you not be able to buy? Will you have to skip adding money into your savings account for a month or skimp on groceries? Decide what’s worth it.
- What’s your motivation behind wanting the item? Do you want the newest iPhone because all of your friends have the newest iPhone, or do you want the newest iPhone because your old phone is broken? One of these reasons has a little more legitimacy.
- Will having it help you somehow? Will buying the item improve your quality of life or save you significant amounts of time or money in the future? Buying a Kindle could save you money on books, since eBooks are cheaper than printed ones, and subscribing to a meal kit could save you the time you would spend meal planning and at the grocery store. Never buy something that won’t have a positive impact on at least part of your life.
- Will you use it in the future? Buying something you’re going to use once and never touch again is rarely worth it, so you may want to skip the latest fashion trend and go for closet staples.
- Do you have to buy it new? Depending on the item, you may be able to rent, scour secondhand shops for a used version, or wait for a sale. Textbooks are often available to rent or purchase used, and many consignment shops have quality clothing at discount prices. Used cars are great, provided you do your research first. Buying new may be an unnecessary luxury.
- Will it help you meet your goals? Depending on your goals (building a retirement fund, spending time with your family, paying off a large debt), a purchase may or may not be worth it. A high definition TV isn’t going to help you retire or pay off your student loans, for example, but a plane ticket may help you build a better relationship with your family. Consider your long-term goals and whether the item can contribute to them or whether it will set you back before you buy.
- Is it a replacement? If you have only one pair of jeans and they split down the middle, it’s probably wise to buy a new pair of jeans to replace them. However, if you have six pairs of jeans and you want a pair in a darker wash, the purchase isn’t really necessary.
- Are there other expenses associated with the purchase? If you buy a car, you’re going to have to pay for gas, maintenance, and parking—this makes the car a lot more expensive in the long run than just the price of the vehicle. Consider how your budget will change as the result of a big purchase if it does have associated costs.
- Make a list of pros and cons. This is the oldest trick in the book, and it’s still around for a reason: It works! When you’re considering an item, whether it’s a food processor or a motorcycle, make a mental list of the pros and cons of buying it and assign the appropriate weight to each reason. If the pros outweigh the cons, it might be a smart purchase. If the cons outweigh the pros, though, you should skip it. As an example, imagine that you’re deciding whether to buy a refurbished computer. Among the pros, it’s slightly cheaper to buy a refurbished one than a new one. But the cons? Generally there’s no warranty, the lifespan of the machine is already shortened, and you won’t have access to the latest technology. So the pros and cons list indicates that you shouldn’t make the purchase. You can do these lists for anything (yes, even a cup of coffee!), and the results are always personalized to you, since you know what’s most important to prioritize.
- Picture the item and a pile of money equivalent to what the item is worth. Would you choose the item or the money? Nine times out of ten, you’re probably going to pick the imaginary money over the imaginary item, so do yourself a favor and save the money for something that you really can’t live without.
- Delay your purchase. Unless you need the item immediately, take some time to mull over making the purchase. If you find that you still want the item in one week or one month, then consider buying it. On the other hand, if a week passes and you forget what it was you wanted to buy, you probably didn’t really want it in the first place. This is particularly useful when it comes to making decisions about whether to purchase body art or piercings. Take a photo of yourself and work a little Photoshop magic so that it looks like you have that tattoo, piercing, or haircut. Set it as your phone background or screensaver so that you have to look at it regularly. If you like it after a week is up, you might be ready to take the plunge.
It’s very easy to talk yourself into buying something that you don’t really need, but it’s equally simple to rationalize yourself out of it. These tips should help you keep your credit card happy and your bedroom free from an excess of unnecessary items. What’s your secret to making smart purchases?
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|