Contemplating a Purchase? This Flowchart Will Help.

Financial success and stability isn’t all about budgeting and saving – it’s also about knowing how (and when!) to spend wisely.  The thing that gets people in trouble is that we make purchases based on our emotions.  Instead of weighing the facts, considering the alternatives, and making a careful and informed decision, many of us simply break out our checkbooks (or debit cards, or even worse, our credit cards) and say, “I have to have that new XX right now!”


It doesn’t matter if you’re buying a new car, a new computer, or even something small like a new pair of shoes – all of your purchases matter.  And if you’re in the habit of letting your emotions run away with your wallet, you’re going to have a hard time staying out of debt or building up your savings.


Sometimes we do need to spend money – there’s no avoiding that.  And sometimes, it’s okay to splurge on something you really want (as long as the purchase doesn’t derail your entire budget).  But we can

spend smarter, and we can take the emotional aspect out of it.  Before making a purchase – any purchase – run your decision through this flow chart:

Click Here: For the “Personal Purchase Flowchart”

But if you want it after 30 days, or if you really do need it, you should still consider the alternatives:  There might be a more affordable option that’s just as good as the thing you want – or you might find that, after careful consideration, you should go ahead and make the purchase.  And that’s okay – as long as you’ve weighed all of your options.  This flow chart isn’t about not spending money.  It’s about making sure that you spend money on the right things, for the right reasons.


Eventually, if you work through this decision making process enough times, you’ll find that you won’t even need the flow chart to help separate needs from wants and make good spending choices.

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.

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