You see it, you
want it. That's part of being human - no matter how old you
are or how much you have. People are forever looking at what
other folks have - new clothes, a new car, a new CD - and
thinking that they would like to own it, too.
Buying things just
because they are "what's cool now" can leave with you very
little or no savings and a closet full of purchases that you
really don't use. According to Linda Goodwin, president of the
Children's Financial Network in Chester, NJ, the first step is
to accept that you are not going to have it all. "There are
choices in life, including financial choices. We all make
financial decisions that may not be the best, and we need to
live with the consequences," she says.
Make a budget - a first step to
curbing impulse buying
To help you make your financial choices, look at how much
money you are likely to have over a set period of time - for
example, the next three months or a season like winter
(December through March). Start by writing down your allowance
and income from regular employment. Consider any events where
you might receive money as a gift - like a birthday or
holiday. Don't include any anticipated gifts in your budget.
Wait until you actually receive the gifts before including
them. You can always revise your budget to include any changes
to your income.
Next, write down
the things that you want to do or buy during the period and
how much each is realistically likely to cost. (Don't worry
about items that your parents will cover.) Things you need to
plan for might include clothing, sports equipment and
activities, such as concerts and eating out. Are you saving
for any long-term financial goals, such as college or a car?
Do you plan on giving any gifts? Will some money go to
charity? Is some cash for spontaneous purchases?
How to decide what to buy - ask
yourself these questions
If, after making a budget, you discover you want more than you
can afford, you'll need to decide what things to get and what
to skip. In other words, consider prioritizing the items you
want to buy. Maybe there are some items that you can postpone
purchasing. You'll have to make some tough choices, and to
help you, here are some questions to ask yourself about each
item. There are no right or wrong answers. These questions are
to help you reflect on your purchasing decisions:
Why you want the item? Your
best friend might have a new computer game. Do you want the
game because you think your friend's cool or because you
actually want to play the game?
It's also
important to ask yourself if you're trying to keep up with
the spending habits of a wealthier friend. It's important to
remember that there will always be people who will have more
or less money than you. Buying something just because
someone has the same item is not a good reason for making a
purchase.
Will you use the item more
than once? Wanting
can be more compelling than having. Don't blow a big chunk
of your budget on something that never sees the outside of
your closet again.
Will a different purchase
make you just as happy? Maybe
you can't afford a whole new wardrobe this period, but maybe
one or two shirts will be enough to spruce up your look.
What are the things you won't
be able to do later if you make this purchase now? Buy
an expensive pair of jeans, and you may not have the money
to attend a concert next month.
How will this purchase affect
my plan for one of my long-term financial goals? Too
many concert tickets now could put off the day you buy a
car, and too many expensive athletic shoes now could put
that big ski trip out of reach.
What if your spending choices
match those of your friends? That's
fine - so long as they really are your choices. Get in the
habit of making your own decisions about money, and you'll
probably be happier about each dollar and purchase you make.
Finally, don't ignore your past
mistakes.
If last year you ran through your December holiday money by
the first week of January, you might try to pace yourself this
season. Or maybe you bought a CD on a friend's recommendation
last year and hated it. You might think twice about taking his
advice again, or decide to borrow the CD so you can listen to
it before you head to the store. |