The Urge to Splurge

It’s quite amazing how much I want to buy stuff.   I frequent sites like Amazon and Ben’s Bargains to see what’s new and on-sale that day.  It’s not easy to hold myself back from buying any new junk that I see.  When I was a kid, I was spoiled by my parents.  I would always get whatever toys I wanted.  My Dad would always get me toys when he traveled overseas.  My parents are typical Asian – they like to spoil their Golden Boy.

Being spoiled meant developing a habit of getting whatever I wanted.  So, I had a tendency to buy on impulse.  For years, I accumulated a lot of stuff.   Most of them became junk because of lack of use.  At first, I felt like I had to have them, but got bored of them quickly.  This is not a good habit.  As I grew up, I knew I had to change this feeling and learn to control my impulses.  Otherwise, I’ll be wasting my money on meaningless little things that has no lasting value.

I have ways of overcoming my problem of the urge to splurge by asking myself these questions:

1. Is it something I need or want?
   This works all the time.  All of my impulse buys are based on emotions.  Sometimes it’s the excitement of the moment.  Sometimes when I’m feeling depressed or bored, I feel the urge to just buy anything shiny and new, hoping it’ll cheer me up.  Over the years, I learned buying whatever I want is counter-productive and wasteful.   I always have to ask if I need it.  For example, buying an MP3 player for my car is needed because I commute almost an hour each weekday.
2. Is it just for me, or will it benefit others in my family?
   I can no longer think for just myself.  I live with my wife and daughter, so my decisions will affect them.  It’s important that I think about sharing my spoils with them.  Share the wealth, share the joy. For example, buying a DVR or media player so my wife and kid can play their favorite shows on-demand.
3. Can it wait?
   I can use the 30-Day rule where I’ll contemplate my reasoning behind the potential buy.  Waiting 30 days also has the advantage of watching prices drop.   I’ve tried this with my recent PC build shopping list.  I knew I needed the new computer, but buying the parts didn’t have to be done on impulse, taking whatever is “the best” one out there.   For example, I was able to wait for a weekly online sale, to get a better deal on a hard drive, and saved at least $20.
4. Is there an inexpensive alternative?
   In today’s competitive market and freedom of choice, there’s always an alternative to everything.  I thought about my DVD collection.  I would make mistakes like buying Deep Blue Sea, a movie that was highly recommended by friends, but it wasn’t worth watching.  In this example, if I just need to watch the movie once, I could have just rented it from Blockbuster or Netflix.
5. Do I have the cash, right now, to buy it?
   A good rule of thumb for me is to know exactly how much money I have in my checking and savings account.  If I don’t have the cash for it, at that moment, then I just don’t buy it!  I can’t rely on credit card financing because it gives me the sense of false security that I can afford anything after a couple of paychecks.  When I was kid, my Dad used to tease me by saying a credit card was the way to get stuff for free.  Of course, back then, I didn’t know what a credit was.  Now I know better.  If used improperly, it’s a painful trap.  I used to take cash advances from a credit card, not knowing the interests (usually as high as 21%!) accrue as soon as I take the money out!  A very good example to follow is saving up some cash before buying anything.

Self control and discipline are needed to fight my urge to splurge.  Following the above rules will get me out of trouble, practically every time.

Tags: discipline, finance, money, shopping