When I read this comment in Business Week, I thought it was very insightful and would be a good test of whether I should buy something or not. For future reference, I created a three question checklist to use. If the answer to either of the first two questions is "no," then I won't buy it. If I get to the third question and answer "yes," I will buy, but be more cost conscious.
- Do I have the money?
YES ---> Go to question 2.
NO ---> Stop and don't buy it. This one is simple. If I don't have the cash, then I shouldn't be thinking about buying it. My exceptions are a home or a first car.
- Do I need it?
YES --->Go to question 3.
NO ---> Stop and don't buy it. If I don't need it or plan to use it frequently, I won't buy it.
- Is a reason to "impress"?
YES ----> Stop and consider something more "cost effective."
NO ---> OK to buy.
While each people may make different choices, here are some example "decisions" for me:
|Item Under Consideration||Question#1||Question#2||Question#3||Decision|
|Nintendo Wii||Yes||No||-||Not Buy|
|Cell Phone||Yes||No||-||Not Buy|
|Luxury Car||Yes||Yes in 2013||Maybe:-)||Look for economy model that meets need|
|HDTV||Yes||Yes in 2009||No||Buy in 2009|
For reference, in 2013 our cars will 10 years old. After February 17, 2009, all TV broadcasts will be in digital HD format and we only own TVs with an analog tuner.
For more on Ideas You Can Use, check back every Tuesday for a new segment.
This is not financial advice. Please consult a professional advisor.
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