Budget tips

Questions to ask when tempted to buy

Buy not what you want, but what you have need of. What you do not want is dear at a farthing.

– Cato the Elder

A good budget allows adequate funds for all that is needed and excludes all things that are not needed. This applies to all budgets and does not point to specific actions that can be taken to draw up a particular budget. Each person has different needs and will therefore need a unique budget. Needs change as circumstances change so budgets change over time.


The nub of good budgeting is the ability to distinguish between actual needs and mere wants that make no appreciable contribution to quality of life. There are are some questions that one may ask ones self to decide if a particular purchase is really needed. These questions include:

  • Do I really need or want this?
    • An example is buying a new jacket when one already has five good jackets. If five jackets is enough there is no real need for yet another jacket. The jacket might look good and it might be available at a very good price. That jacket is a temptation that may be hard to resist but if it is not needed it is too much to pay. The cash could be saved with no appreciable difference to ones lifestyle.
  • Will I actually use this?
    • The purposes of a jacket are to keep warm, look good and have a sufficient variety of clothing. A sixth jacket has the same purposes as the five jackets one already owns. There is no real gain to buying yet another jacket if one already has a sufficient number and jackets. The sixth jacket does not seem useful. Beware of succumbing to temptation by persuading ones self that one really needs to extra variety allowed by that sixth jacket.
  • What is the specific purpose for purchasing this item? Or, what do I expect to get out of it?
    • The specific purposes of the jacket is warmth and appearance. Purposes that are served by the jackets one already owns.
  • Is there a better alternative means of satisfying whatever purpose is driving the decision to buy this item?
    • In this example the the purposes are already satisfied by the existing stock of jackets.
  • Is it worth the money?
    • If it is not needed then it is not worth the money, at any price. If it is needed that that depends upon the usual amount one would expect to pay. It is  good to shop around to compare prices and quality to get the best the best deal. Shopping around can lead to quite considerable savings.
  • What is important to you? How important is buying this item compared to the alternative of adding the funds to savings? This is intimately related to the importance you attach to your savings goals.
    • A jacket is a useful part of a wardrobe, particularly in cold climates. It is important to have some jackets, or alternatives such as coats or jumpers. However enough is enough. When one has reached the point of having enough any furthers jackets are of no additional use.
  • Will I still meet my savings goals if I buy this?
    • That depends on how much you have already spent this week. This illustrates the benefit of treating savings as a fixed expense by putting a sum aside every week and living on that which remains.

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