AllOnMoney.com has always aimed to teach how to save and earn money. And this article focusses on shopping expenses, with the objective of reducing them as much as possible.

Thinking before buying something, one of the keys to savings

The best way to reduce expenses is to avoid shopping. However, as you can imagine, this is not as easy as it seems. We all live in a consumer society where everything around us encourages us to buy more and more. Therefore, to avoid falling into the trap of irresponsible consumption, here are the three questions you should ask yourself before buying something:

Do I really need this?

People have needs and they are satisfied with goods and services. Therefore, the ultimate goal of a purchase is to satisfy a need. For example, you buy a car when the need to travel 30 miles to get to work. However, many times, individuals get confused and buy without really having a need. This refer to buying on a whim.

Buying on a whim is totally unnecessary and involves a waste of money that could be avoided without too many problems. For this reason, to avoid this type of meaningless purchase, which does not satisfy any need and which represents a considerable expense, the question you must ask yourself is: do I really need this?

Can I pay it back without going into debt?

Suppose you are completely sure that, you need to buy an item. For example, an iPhoneX. The next question you should ask ourselves is whether you can pay it on the spot, without getting into debt and without resorting to any kind of financing, even without interest.

If you have the money and can actually pay it now, you go ahead with the purchase. If, on the other hand, you do not have that money at the moment and have to resort to the debt, do not buy it, but first save and only buy when you have that money.

Can I get it cheaper?

It is very important that before buying an item, you should check if it can be bought at cheaper rate somewhere else. By comparing the prices of the purchases in different shops, you can save a significant amount of money at the end of the year. If the purchase is in a physical store in your city, compare the price at least three stores.

There is no doubt that with the internet, everything is simpler. Amazon and eBay, for example, are two very popular portals where you can buy everything you need from different vendors. You can also use Google Shopping, Google’s tool to compare prices among thousands of online sellers.

In short, by asking yourself these questions before buying anything, you will be able to make the purchase a rational and objective process. If the answer to the first two questions is “yes” and the third is “no”, you can buy without fear. If, on the other hand, the answers are different, do not take out wallet and you will avoid an unnecessary expense and save hard earned money.

Author Bio:

Hi, I am Nikesh Mehta owner and writer of this site.

I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.

I can be reached at nikeshmehta@allonmoney.com. You may also visit my LinkedIn profile.