ARTICLES > Five Questions to Ask Before you Buy ANYTHING.
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Five Questions to Ask Before you Buy ANYTHING. We’ve all been down at the mall, seen something we’d like, and thought, “I’ve got to have that, and it only costs...” But the decision you’re about to make could have far reaching effects on your future lifestyle and living standard.Here’s FORTIfi’s five questions to ask before you buy anything: ► ONE: Do I really need this? Now, there is nothing wrong with the occasional luxury. In fact, if we don’t treat ourselves occasionally, chances are we’ll eventually go out and overspend just to relieve the frustration. The key word, however, is ‘occasional.’ The best thing to do is set aside some money for those treat-type items and stick to that budget. A lot of people even take their ‘treat’ money out of the bank in cash and only spend that amount - when it’s gone, it’s gone! ► TWO: Will I go into debt if I buy this? Unless you pay in cash (either cash from your wallet or your eft-pos or debit card), or clear your credit card before the next due date, the answer to this question is almost always “Yes”. This is the number one way ordinary New Zealanders get themselves into inescapable debt – they overspend on their credit cards. It only takes a small luxury here and another small one there, and before you know it – you’re struggling to repay your credit card debt. ► THREE: What will the actual cost be? If we do decide to buy something on credit, the first question asked should always be, “What’s the actual cost?” Recently I saw a lap-top that I’d quite like. It cost around $1,000. But there was a deal - the store said I could have it for just $10 a week spread over three years. $10 a week didn’t seem much, until I worked it out. Spread over three years, $10 a week is a lot more than $1,000 – it’s $1,560! You see what I mean? It wasn't such a great deal after all. I was paying one and a half times what the lap-top would have cost if I paid cash. Avoid purchasing anything on credit, but if you do, calculate the actual cost of the item.
This is like a summary question of the previous four. As I've already said, just like you budget for groceries and petrol and all your other necessities, budget some pocket money so you can buy the occasional luxury or save up for something special. And, stick to the budget – if you don’t have the available pocket money to buy that treat, leave it until you can, it could save a lot of heartache in the long term. Read the article from the FORTIfi Resource Centre: Ten Things to do to Help Get Your Finances in Order. |