This is written for the people who struggle with a financial plan and are always impulse buying. If you have a full time job that is well paid and your partner does too, you have no kids…I’m completely jealous! Only joking, but if you are on ‘good’ money but don’t have a big scary life goal, retirement plan, savings, an emergency fund, multiple income streams and sound investments…then now is the time to take a look at your spending.
And if you aren’t on good money? This is definitely something for you to read!
It is incredibly easy to pop to the shops and see the-most-beautiful outfit ever that you must immediately have. Even easier when you have children and are confronted with the cutest kids clothes ever (why didn’t they have any of the clothes they do now when I was a child?! I wore the most tragic outfits I’ve ever seen).
My goal is to help you get out of debt together, and one important parts of this is to save money. We live in a time where adverts are shoved in our faces all of the time, luxury items are attainable by the use of credit cards and it feels like everyone else is buying everything that they want with no problems at all.
If you are used to buying various new belongings on a whim every time that you are in a shop or browsing online, this can be a real problem and a catastrophe for your budget. But never fear! I am here to share with you two simple questions to stop and ask yourself before you head to the checkout to help you with your money saving.
There are two main things to think about when you find yourself in a potential impulse buying situation:
1) How long would it take me to earn the money that this item costs?
This method is great because it makes you stop and think about it. Anything that causes you to pause before purchasing is a good idea. For example if you really want to buy a huge new all-singing all-dancing TV that costs £300 and you get paid £10 per hour, you can see that it would take you 30 hours to pay for it. The average work day is generally 8 hours per day, so this works out as 3.75 days – so almost 4 days that you have to work to afford the TV.
It may not sound like a lot to you, but don’t forget there are only 30 or 31 days (apart from February) in a month, and you will need to pay for your mortgage, grocery bill and all of your other bills too.
In fact, we could look at the mortgage and see how long it would take you to work for that too, just to put it in perspective a bit for this example. Let’s say that your monthly mortgage payments are £800 (ours is less than this, if you are interested!) and that you earn £10 an hour in work. This works out as 80 hours which works out as approximately 10 days if you are working an 8 hour day.
You could do this for all of your household bills and see how much you have to work in order to pay for them…this should help you look at things from a different perspective, which will be helpful when sorting out your finances whether it be for debt repayment or becoming financially independent (although they are one and the same!).
If you are dreaming about an item that you have seen and really want, whether this be something like a new dress, or a new fancy kettle (is it just me that loves shiny kitchen appliances?!), if you know how much you earn per hour, you can easily work out how long you would have to work in order to purchase it. Do you really want to have to work a whole day just to buy one thing that you will probably just use once and then shove to the back of the cupboard? Or a week?
Depending on how much you earn, and what it is that you want to buy, this can be really handy in seeing it broken down like this, to help put it into perspective.
If you are paid an annual salary there are various calculators out there to help you figure out your hourly rate such as this one UK Hourly Wage Calculator.
Retailers often try various tactics to get us to buy without weighing up the pros and cons. One thing thing that they do is add discounts to items to give us a sense of urgency because we think that we will miss out on this great deal that they are offering, so taking a step back to have a think about your purchase before having over your credit card, will help you on the way to fulfilling your financial goals.
2) Can I sell something or earn some money to cover the cost of this item?
Again, this is a great technique for making you stop and think before you make your purchase. Anything that helps you delay your purchase helps, because it will help to curb your impulse spending, which is what this post is all about!
If you see a new pair of boots that you really want and know that you would wear a lot (so would be a good buy), then fair enough! But can you sell something to pay for them first?
Have a look round your house and see if there is anything you can sell – I guarantee that there will be something! Go through your wardrobe and find something that you think you’ll wear one day, but never do. Put it up for sale on eBay, or a free listing site such as Gumtree or Facebook local selling pages. The added bonus of this is de-cluttering your house.
Ideas of things that you could sell:
- Baby clothes
- Kitchen appliances
My goal for myself and for you – is to build wealth. The richest people in the world don’t stay rich from buying every little thing they see (me: ‘Ooo, look, a shiny thing!”). If we want to get rich, then we need to be smart with our spending.
This doesn’t mean never buying anything that you want – life is fun, and we don’t want to deny ourselves of every little thing that brings us joy as there’s no shame in enjoying buying a new pair of shoes or a meal out with friends.
This could also be extended to larger items also such as a new car. Could you sell something to pay for a new car? Chances are if you can’t, then you will probably be looking to get a car on finance AKA get in debt to buy this new car. If you already have a car that you can sell to go towards the purchase of the car and perhaps some other items then this is obviously the ideal route to go down.
It can be hard to think of this as something do-able when it comes to crazy expensive items, but why are you buying things if you can’t afford them in the first place? The trick to all of this is to question if you can actually afford to buy the new paraphernalia before going ahead and blowing all of your spare cash on it. Your money after household bills is for debt payment and savings. You are going to set your goals back further and further if you waste all of your money on things that you don’t need.
Of course, you don’t need to sell something that is lying around your house, you could go to a car boot sale and re-sell something that you buy there for a profit. You could make money in lots of other ways such as mystery shopping, blogging, lots of various ways that I will be sharing with you in the future.
If you are a parent, don’t forget that your little ones learn from watching and copying what you do. You can show them that instead of buying whatever their hearts desire, they need to work for it, make smart decisions and sell some of their property in order to buy it.
It may seem like these questions won’t make much of a difference towards achieving your financial goals, but I’m telling ya, they most certainly will! The key is your mindset. Your mindset is what will get you out of debt as quickly as possible. Snapping out of bad habits is hard.
That’s why I’m here – to help you break through the bad habits and turn them into good ones. Being aware of how long it takes to work to buy something will make you more aware of the amount of money that you spend. Selling goods before buying new ones is a great way of de-cluttering your house and counter-balancing any spending that you do need to do.
Does anyone have a problem with impulse buying? Are you managing to meet all of your financial goals?