I want! I want! I want!
Knowing how to spend money is just as important as knowing how to save money. In an age of consumerism, instant gratification, credit cards and online shopping it is becoming easier to spend money without really thinking about whether we really need what we are buying.
So much so that many of us experience buyer’s remorse not long after we purchase an item.
Ajapa Financial Literacy encourages the child to ask the right questions before purchasing an item. However, even adults often find it difficult to differentiate between a need and a want.
So how DO you tell the difference?
Need– something you have to have
Want -something you would like to have
A need is an item that you cannot SURVIVE without. These include items such as food, shelter (rent), clothing etc
A want could then be a Michael Kors watch, an iPad, and your twentieth pair of shoes.
Individuals today find it much harder to tell the difference between items they need and the item they just crave. The desire to buy the latest iphone can become like an obsession. Young women today spend money on human hair before they have set aside money for their rent. We are beginning to substitute the things that make us feel good about ourselves with the things that help us to provide a good living for ourselves and our loved ones.
The trick is to imbibe the right priorities in ourselves and in our youth as early as possible. Ajapaworld has drawn up five questions to ask yourself before you buy an item.
- Can I live without this item? You know you don’t really need the iPhone 5s; after all you just bought the iPhone 4. Nor do you need yet another watch, you already have three. However, you do need to replace the carton of milk, pay for your car to be repaired and refill the fuel in your generator.
- Can I afford this item? In this day and age if credit cards and overdrafts, we are often lulled into believing we have more money than we have. And even if one does have the funds, spending 80% of what you have in your account on a want can cause more harm to your financial stability than good.
- Must I buy this item today? Sometimes giving yourself time to think about a purchase or even sleep on the idea can change your perspective. What you thought you needed today (or else you would die) may seem silly tomorrow.
- What am I giving up to buy this? Too often we substitute a need such as 50% of one’s grocery money to be able to afford the latest bag, phone etc. This attitude may seem harmless the first few times but it will create a mindset that cannot distinguish between what is important and what is not.
- Am I getting the best deal? Ok, so you need to get a new pair of jeans, you have seen the ones you like but they are a bit costly. Can you wait for them to go on sale? Can you buy them cheaper somewhere else? Or perhaps you should look for another pair of jeans that you like that won’t cost as much. This question also applies to groceries and other items for the home.
Remember it’s never too early or too late to learn about managing your money.