Last updated in November 2020
Should I buy it or not? We all have asked us this question at least once, or more commonly, ask ourselves at least weekly. This is why I developed an easy to follow flowchart that makes the decision for you.
The Should I Buy It? flowchart prevents you from wasting money on things you do not need and encourages you to buy those that add value to your life. The chart is especially helpful if you are prone to making impulse purchases and want to learn how to live frugally.
Monethalia does not offer financial advice. Should you take any action based on the information provided, Monethalia will not be liable for the outcome.
Table of Contents
Should I buy it? flowchart
To use the Should I Buy It? flowchart, start in the left-hand corner and work your way downwards, following the arrows.
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Should I Buy It? flowchart explanation
Questions 1-3: The easy bit
In the first question, the flowchart will ask you whether you can borrow the item from a friend. You can often easily borrow items that are necessary but are not frequently used.
Borrowing a TV, for example, is much more difficult. Unless your friend has a spare TV they absolutely do not need, they are likely to want the TV back quickly. Items that are frequently used cannot generally be borrowed. In this case, proceed to question 2.
Question 2 will ask you whether you already possess a similar item that can fulfill the job of the object you wish to buy. How similar depends on you.
For example, looking at handbags, there are many different designs yet they all have the same purpose, to carry something. In terms of carrying ability, you could group similarly sized bags together. In terms of fashion, you could group similar colours together.
Questions 4-9: Within spending allowance
This is where the Should I Buy It? flowchart becomes slightly more complicated. First, let us assume the item falls within your spending allowance and follow the left branch:
Question 4 will ask you whether you need the item you wish to buy. Need is defined as you have an immediate use for the item and not having compromises your survival, your regular life or convenience.
If you do not feel you need the item, proceed to question 5 and ask yourself whether you are buying the item for yourself or somebody else. Needless to say, you should not buy an item for yourself if
- you do not need it or
- it is for someone else but does not do any good (question 6).
Assuming you need the item, question 7 asks about your gut feeling or intuition. If you feel negative or are concerned about the purchase, do not buy it. Find out why you feel this way and, if appropriate, identify an alternative.
Question 8 looks at urgency and priorities. Prioritise purchases that immediately have a major impact on your quality of life over those that are minor. If there is anything you need more urgently, check that you can afford to buy both items (question 9).
Questions 10-11: Not within spending allowance
Here, we go back a step and look at items that may fall outside your spending allowance. Question 10 will ask you whether you can make ends meet for the month. Clearly, if you otherwise cannot afford food and shelter, do not buy the item. Ideally, you should have an emergency fund (or rainy day fund) from which you can take the money.
If you have sufficient money, proceed to question 11 which will investigate whether the item you wish to buy is essential. “Essential” means necessary to maintain your quality of life.
Question 12: Comparision
Before you buy, the flowchart will ask you whether the item you wish to buy is the best choice in regards to price and quality. If possible, look at price-comparison websites, and check for cashback, discounts, and coupons.
Prices also usually depend on the quality of the product. If the item you wish to buy is one that you intend to use frequently, you may want to opt for slightly higher quality so it lasts longer. If you plan to use the item infrequently, average quality should do.
Making room in your budget
Sometimes, there is something you really need to buy even though it does not fit into your budget. If you do not have an emergency or sinking fund that can cover the expense, you have to take the money from something else.
Consider whether there is anything you do not need, starting with luxuries. Examples of this include a Netflix subscription, takeaway coffee, or clothes. Next, you could look at reducing your grocery costs by cutting down on meat or cooking more simple meals.
Taking out debt should be your last option. If you absolutely need to buy something, you could ask parents or friends for money. If there is no other option, 0% interest credit cards can help you out.
Spend guilt free
It is okay to spend money. Moreover, it is necessary to make certain purchases. This includes things you need for physical survival but also those that benefit your well-being and mental health. Therefore, there is no need to feel guilty if you buy something that is approved by the flowchart.
Should I Buy It? flowchart limitations
There will be times when the Should I Buy It? flowchart is unhelpful. The decision on whether to buy something is complicated and may depend on a number of factors. Additionally, it will not help you with other financial decisions such as whether to overpay your mortgage, or whether you should buy a house.
This guide attempts to simplify this complex decision and aid in everyday situations to make saving money easier.. The Should I Buy It? flowchart has the potential to save you from impulse buying and unwise decisions, but its success rate also depends on the user. When using it, you have to honest with yourself.
Making impulse purchases is only one of many bad money habits. To make lasting changes, learn how to fix them.
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