To buy or not to buy - How do you decide

The first step of budgeting is to avoid unnecessary purchases. But the dilemma is how to differentiate between needs and wants? Whether to buy a product or not to buy? Most of the products we purchase can be based on our wants more than needs. By the time you understand if a particular product or service is your want or need, you might have already completed the purchase. There can be several things in your household that were bought impulsively and realised later. 

While making any purchase you have to decide whether you need it or not. There are certain steps you can take while making a purchase to avoid unnecessary purchases. 

Check: How to implement Zero-based budgeting method in Personal Life?

Can you afford it? 

The first question you need to ask yourself while buying a product is, Can you comfortably afford it? If you can happily afford it without any disturbance to the other mandatory expenses, then you can go for it. If the answer is NO, then you need to rethink the purchase. 

If you don’t have enough money to purchase or will end up in a debt to complete the purchase, then buying it would have a bad impact on your financial life. You can check other options like saving for the product and purchasing it when you have enough money to complete the purchase comfortably. 

For example, if you are planning to buy a car and are stuck between car A worth AED 35000 and car B worth AED 50,000. Of course, the EMI, down payment, and other charges will vary if you are planning to buy it with a car loan. Will you be able to afford the EMI of car B?

However, even if you can buy it immediately, it doesn’t mean you are financially successful. You need to analyze other factors as well like, How worthy the product is? What change can it get to your life? 

Is it worth buying? 

You need to understand whether it is worth buying or not. This happens mostly in the case of way too expensive items like branded footwear, clothing, electronics, mobile phones, gaming consoles, etc. 

Even if you can afford the item, you need to figure out the uses of the product and how often you use it. Buying something just for one-time usage or for a party you need to attend, or if your friends have it, is not an ideal choice. Be realistic and check what worth it would add to your life on a daily basis. 

Also, check: Buy now and Pay later – How beneficial is this?

Does it align with your life goals? 

Will the purchase you are about to make will be worth it even after 10 – 15 years? Figure out your life goals, if you have worked hard to make this purchase and would make a huge difference in your life, then you can go ahead with the purchase. 

For example, if you have a home mortgage or personal loan or any other debt to clear and plan to purchase a brand new model TV, it doesn’t make sense. If an expensive purchase that is making you have second thoughts before purchasing does not align with your life goals then it might be better to avoid such purchases. 

Do you have any other important needs? 

Check your expenses. Do you need to sacrifice something to complete this purchase? If yes, then understand what is important. If you are planning to take a debt payment holiday to buy something or avoid saving for retirement or an emergency fund for a month, then understand clearing debts, emergency funds and retirement savings are the most important factors in your life and putting it on hold for some stuff-based purchase is not worth it. Ensure you are not giving up something very important in life to make the purchase. 

Is it a good time to purchase?

You need to figure out whether you need the product right away or you can wait till the price drops. Any product is expensive until the demand is high. Once the demand falls, the price of the product might come down. So you can wait till the right time strikes, see if you can get a discount and make the purchase. Sometimes, a product can be available at a lower price when purchased online or you can see if you can make use of your cashback credit card. Ultimately, your goal should be to buy the product at the best price that would save you money. 

Sleep on it 

If you find any product that instantly attracts you and can’t resist buying it, then the first step is to walk away. Go back home list down the pros and cons. Sleep on it. Give yourself at least a night time to think about it. Even after thinking about overnight you still want the product then check the pros and cons of having it, how it impacts your budget, and other factors before purchasing it. 

Are you using cash or a card?

Most impulsive purchases happen when you pay for them using a card, especially a credit card. Using a card will not make you aware of how much you are spending unless you check the bills at month-end. Try purchasing using cash which will make you automatically realize how much you are spending and stop you next time while making such purchases.

There can be several fancy items you feel like wanting but before that you need to decide the worth of the product in your life and finances. At times you can purchase the product without overthinking but just ensure it shouldn’t impact your financial life badly. 

Meet the author
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Nikitha is a Senior Analyst at She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.

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