In any given day, you’ll make hundreds of decisions with conscious thought or in your subconscious mind. You’ll make a decision on when to get out of bed, what to wear, what to eat, and in hundreds of other things you do. However, it is worrisome that many people make financial decisions without taking the time to think deeply about such decisions. Interestingly, most of the financial decisions people make without much thought has to do with their expenses. Below are three broad tips to help you make smarter purchasing decisions.
Buy what you need
The key to making smart purchasing decisions is to only buy what you need – you can always buy what you want when money is no longer a serious concern for you. Many people don’t know how to differentiate between what they need and what they want – hence, they tend to spend money on many items that catch their fancy while important bills remain unpaid.
To ensure that you make disciplined purchases, you may want to start out by creating a list every time you are going out to shop. You also need to stick to the list – you can also go to the store with the exact total of the items on the list and you should make sure that you leave your card behind.
When making a purchasing decision, you should strive to take the time to comparison shop in order to get the best deal possible. For instance, expensive price tags don’t always equal good quality, so you need to ensure that you are getting premium quality when you pay premium prices. In fact, you can get some good quality items (not heavily branded) at low prices if you shop in the right places.
You also need to understand that buying cheap doesn’t necessarily mean that you are getting a good deal. A cheap item that becomes faulty/worn out/useless twice as fast a pricier item will cost you more money in the long term.
You also need to understand that most things can be negotiated for a lower price or a better deal – especially big-ticket items. You can compare prices online before you head to the store so that you have an idea of how much money you can expect to pay for the good or services.
Use the smartest payment option
The third strategy for making smart shopping decisions is to use the smartest payment methods when paying for goods and services. The payment method you choose for each purchase could determine the impact of the said purchase on your finances.
A credit card is a smart payment system that allows you to fund your purchases for goods and services on credit. The sweet deal about using credit cards is that you have 30 days (or more) to pay back with interest. It is fast, smooth, and helps you to build your creditworthiness. However, you need to use credit card responsibly to avoid financial troubles.
Debit cards a great payment system that offers you the convenience of credit cards – with your own money. Debit cards eliminates the need to carry cash, you don’t have to worry about paying back balances and interest. However, with debit cash you can only spend the money you have and that could be a limiting factor when you come across great deals.
Cash still works in most economies and it can be a great tool to ensure that you don’t go over the limit in your expenses. However, the easy accessibility of cash means that it could lead you to making many impulse purchases.