How To Determine If An Expense Is "Worth It

We’re all confronted by hundreds and thousands of buying opportunities each day. From in-store displays, to advertisements, to salespeople, we’re give the option of spending money almost all-day long. However, doing that wouldn’t exactly be a good idea. So how do you know when you should spend and which items you don’t need?

Everyone spends money, but it’s important to do so wisely. There are some purchases that are necessary, there are some that are unnecessary but nice to have, and there are others that are simply not worth it. Figuring out the difference is an important part of spending money wisely.

One of the best ways to reduce your spending and to save money is to take some time to determine if something is “worth it” before you buy it.

Before you make a purchase, think about whether or not it’s worth it to you. A good way to help you determine this is to ask yourself some questions. Here are a few that you may want to try:

Sometimes, we feel like we “should” buy something because it’s such a good deal. In reality, something is only a good deal if it’s something we actually need. You won’t be “saving” ten dollars if you buy a $20 item you’ll never use for half price. You’ll be spending $10 on something you don’t need.

Before you make a purchase, think about whether you’d buy the item even if it was full price.

Do you already have a red dress that you can wear to parties? Is the one you’re looking at right now significantly better than the one you already own?

Before you buy something, think about how often you will use it. Sure, that cupcake stand looks great and it’s a good price, but how often do you actually make or serve cupcakes? If you’re not going to use the item, or if you’re only going to use it once, all you’re really buying is additional clutter for your home.

Don’t buy something because you think it will make you change your behaviour either. If you’re not the kind of person who makes roasts very often, will a new roasting pan really cause you to change? The most likely answer is no.

Not all products are built to last, but thinking about how long something will last can help you decide if it is worth it. If you think those new shoes are likely to fall apart after a few months, you might actually be better off spending a bit more money on a more durable pair.

A good way to stop “impulse shopping” is to wait to make a purchase. Think about the item you’re looking at. Will it still be there next week? Will the price be the same? If the price increases, does that matter to you? Go home and sleep on it before you buy it. Or go for a walk around the block. Just the act of walking out of the store and taking some time to think can help you cut down on unnecessary purchases.

For large or expensive purchases, try waiting 30 days before you buy them. Not only will this give you some time to think, but it will also allow you to save up for the item.

Sure, that coat looks great on you, but is it warm? Is it durable? Is it the best price? Before you buy something, think about whether you’ll be able to get a better option somewhere else. Just thinking about other choices might make the one you’re looking at right now seem less appealing.

Before you buy anything, figure out where it fits in your budget. For example, if you see a great $20 shirt, take a moment to consider your clothing budget. How much space do you have left in your budget this month? If you’ve given yourself $100 to spend on clothes each month, and you’ve already spent $90, then you can’t fit the shirt into your budget.

If the item isn’t in your budget, what will you cut to make it fit? Is that cut worth it? There’s nothing wrong with spending $10 less on eating out one month so that you’ll have $10 extra to spend on clothes, for example, but you need to make sure that you’re making a cut in one category to overspend in another. Then think about whether you’ll be happier with the shirt or with the $10 spent in a restaurant. This can help you make a decision and determine if the purchase is “worth it.”