I have a bin in my closet full of clothes I’ve never worn. I have a donation box in my parent’s garage full of purses, sweaters, shoes, and accessories that I’ve used at least maybe once? The very last thing I was thinking when I bought these things was, “Should I buy this?”

What frustrates me the most?

That the money I spent on these things could have instead gone towards something valuable and meaningful or into my saving account.

These are things I accumulated during my teens and mid-twenties. When I started working at 16, as soon as I got paid, I would go shopping and spend all of it.

At 16, I was living with my parents and didn’t have any financial obligations so spending all of my money was a “no brainer”, I thought to myself, “Why do I need to save right now?”, “I’m young, why do I need to worry about saving for college?”

I wish someone would have helped me understand how important saving was and that spending money on clothes, fast food, and junk was a waste of time. Because when I look at the things I’ve accumulated throughout my teen years and mid-twenties, it was junk.

To be fair, my mom almost always told me to save when I would come home with my shopping bags from Guess, Bebe, Old Navy, Walmart, Marshalls, etc. (I cringe at that the clothes I bought at Bebe….).

So, what did I learn? Stop wasting money on things I don’t need and be mindful when I do spend.

If you just love spending money and are running out of space (or already have) for your things then you NEED to ask yourself the “5 Questions Before Buying Anything”.

The thing is, when we’re buying, we are not really thinking (right?). So, one of the most important things we can do is to take just a few moments to ask ourselves a few simple questions.

5 Questions Before Buying Anything

Before we start, I’ll say that to make the most out of these 5 questions. When you do buy something, try your best to consolidate your shopping trips. The less you walk into a store or shop online, the better!

Also, always keep a list of things you want to buy. I use a little black notebook that’s easy to carry and I also use the notes app on my iPhone.

With that in mind, let’s get started! These are the 5 Questions Before Buying Anything.

Question #1 – How much is this costing me?

The first question you will ask yourself is, “How much is this costing me?” Your answer is not just going to be the price of the item. It’s not going to be $20, $39.99, or $120.

To answer this question the right way, you’re first going to find out your hourly take-home pay.

Grab your latest paycheck and divide your net pay or income by the hours worked. This is how much you actually make an hour, it’s your hourly take-home pay.

You probably know how much you make an hour but after taxes, healthcare, social security, retirement account contributions, how much do YOU actually make an hour? Take a few minutes to do this, you’ll most likely be surprised by the number.

Here’s an example:

In the example above, Total Income was $2,592 but after deductions (401(k) and health savings account contributions) and taxes (Federal, FICA, Medicare, and State), net pay is $1,801. So after working 80 hours, the hourly take-home pay is $22.50.

Before contributions and taxes, you can say you make $32 ($2,592 / 80hours) but the hourly take-home pay was $22.50 ($1,801 / 80hours). Ouch!

This small exercise helps put things into perspective and you get the chance to understand how much you really make an hour.

Alright, now that you know your hourly take-home pay. How many hours of work did it take to buy this item?

Using the example above, the hourly take-home pay is $22.50. If I’m thinking about buying a pair of shoes that cost $80 (don’t forget the cost will be a little higher when you’re charged taxes). If I do buy them, it would have taken me 3.5 hours ($80 / $22.50) to buy these shoes.

Then I would ask, am I okay with that? Are these shoes worth 3.5 hours of work? If yes, let’s move on to question number 2.

Question #2 – How long will it last?

I made this mistake so many times. Buying something and not thinking how long it would last. For example, the clothes, accessories, and shoes I bought.

I live in Chicago and snow boots are a must. However, what did I do? I would buy a cheap pair of boots (about $40) that barely lasted me a season and then bought another the next.

What I should have done was buy a good quality pair of snow boots (about $90), even if they were more expensive, that would have lasted me a solid four winter seasons. The boots would have been more expensive upfront but a lot cheaper down the road because I didn’t have to replace them as often.

So, when you’re okay with paying a certain price for an item, the second question you will ask yourself is, How long will it last? A season, few years, or less than a month?

If it’s an item that should last a few seasons like a winter jacket, don’t buy something cheap, buy something that will last.

Like in my example above, the more expensive boots would cost me more upfront but they would last me longer and ultimately cost me less.

Question #3 – Is it on sale?

The third question you will ask yourself is, “Is it on sale?”

Most stores usually have sales but the most important question is, “Is it really on sale? Am I getting a good discount compared to the retail value?

Some stores (like Macy’s) ALWAYS have sales so when I see something on sale I don’t get as excited because it’s.always.on.sale….

You will find some of the best deals only a few times a year like during Black Friday, Memorial Day, or the Cyber Monday after Black Friday. So if you want to buy something, definitely take advantage of these sales and only buy it during this time.

My sofa, for example, one of my most expensive purchases, I bought during a Memorial Day sale. I have to thank my co-worker Peter for this tip!

I hope you feel motivated. You only have to follow three steps to start implementing this technique: look forward to implementing The Bulk Budgeting Technique in your money management routine!