5 Questions to Ask Yourself Before Every Purchase

One way to improve your financial situation – and your personal life – is to simplify how you live and be more conscious of your purchases and the lifestyle decisions you make. Simplifying your life will lead to greater freedom since you will reduce your dependency and need for “things” to experience happiness.

Here are 5 questions to ask yourself before making each and every purchase:

1. How many hours will you have to work to pay for this purchase? In other words – how much of your energy will you need to use in order to make this purchase. Will you have to work three hours? Thirteen hours? Thirty? This is a concept based on the “labor theory of value” written about Adam Smith about 200 years ago. Smith wrote about how the value of any object could be measured by the amount of work an individual would have to exchange in order to obtain it.

2. Is this a purchase you really need to make, or do you have superficial reasons – like impressing someone else? Impressing someone else can also take the form of buying something simply because you envy someone else who has these items, even if you don’t necessarily respect that person.

3. Will this purchase make your life more satisfying or worthwhile, or make your life easier for at least six months? If it doesn’t have this kind of staying power, you should probably reconsider buying it. Items that give you instant gratification but then get tossed in the garbage or forgotten in your closet soon after are rarely worth the money or time to purchase them.

4. How does this purchase affect the environment? Think about how the item you’re considering buying was created, the steps in the manufacturing process and the transport to the location from which you would buy it. Are irreplaceable resources being used up when you make this purchase? Small actions individuals take matter and add up when it comes to protecting and improving our environment.

5. Could you use the money required for this purchase in a better way? For example, if you’re saving for a long term goal, investing for your future or the future of your children, perhaps those goals are more important than this particular purchase and the money could be better spent elsewhere. Maybe the money would be better used if you gave it to a charity or someone in need?