Ways to Save Money #4: Have a Dollar Amount Threshold Before Purchasing
This one is very simple. A lot of us buy a lot of things on impulse, only to later wonder why we bought it, or to not use it or eat it after all, and then we realize it was just a waste of money. Multiply these impulse purchases by however many times you make them and by the dollar(s) they cost, and they can add up quickly.
Let’s say you make impulse purchases of $3 to $5 or $10 five times a week. Averaging that out, it could add up to $30 or more a week spent on items or food you really didn’t want or need.
So here’s the technique to practice. Set yourself a threshold amount of money. Anything that costs more than that, you wait a certain period of time (the cooling-off period) before you allow yourself to buy it.
One purpose of this technique is to prevent impulse purchases. If even some portion of your money is spent on impulse purchases, giving yourself a cooling off period can keep you from making a number of those purchases. By giving yourself a cooling-off period, you give yourself a chance to evaluate whether you really need that item. You might end up amazed at how many things you do not purchase simply because you waited.
Here are the details:
- Decide on a dollar amount that you consider significant. It can be $1, $10, $100, or any other amount. I suggest you start low, though—try $10, or at most $20. This is your threshold amount.
- Now decide on a cooling-off period. It could be 24 hours, or overnight, or five days, or a week. I recommend you start with three days. If you are a very impulsive shopper—in other words, if you find yourself buying things on impulse a lot—give yourself a longer cooling-off period—say, a week.
- Now, every time you find yourself wanting to buy something that is over your threshold amount amount, wait until your cooling-off period is over before you make that purchase.
- If, after the cooling-off period is over, you find you still want that item, then take another step. Ask yourself what else you could spend that money on, and ask yourself which is more important. Let’s say you wanted to buy a CD. After the cooling-off period, you still want it. But do you want it more than a video game? A DVD? Some food for your pantry? Do you want that item more than you want to save the money toward, say, a nice vacation or something more expensive that you have your eye on? Weigh your answers, then make your decision.