There are times when offers cloud good judgment when buying and we end up buying products that we may not need, we may not use them and they prevent us from meeting our savings goals. Sales periods usually lead us to spend money in a more uncontrolled way with the excuse of lower prices.
To prevent a bad purchase decision, made impulsively, from negatively affecting our financial health, we can apply a trick not only in these periods when consumption increases, almost inevitably; but in our day to day, especially if we tend to be compulsive buyers.
Finance expert and host of the My Millennial Money podcast, Glen James, explains this simple gesture. It consists of taking our annual income as a reference to calculate whether or not we should buy that object or product that we want impulsively.
Wait a day to make the purchase
As James explains, when we want to buy something that costs more than 1% of our gross annual salary (or our total income, if we have more sources of income), we must wait a day to buy it. It seems silly, but this technique will help us cut down on bad purchasing decisions.
This 24-hour period gives the buyer the chance to think about this purchase: do I really need what I want to buy? How much am I going to use? If in the end we discover that it is something that we really need or want, go ahead with the purchase. But if we discover that the need to buy it was based on an impulsive act to get some momentary satisfaction, the fact that we waited a day will help us avoid spending our money in a necessary and thoughtless way.
183,000 euros per year and you have no debts or if you do, the payments are manageable and controlled. If, due to our level of income, we consider that 1% is too high a percentage, it can even be reduced. In the end, the trick is to think about the decision and not buy impulsively.