U.S. markets open in 4 hours 46 minutes
  • S&P Futures

    +6.00 (+0.15%)
  • Dow Futures

    +41.00 (+0.12%)
  • Nasdaq Futures

    +23.00 (+0.19%)
  • Russell 2000 Futures

    +2.90 (+0.16%)
  • Crude Oil

    +0.54 (+0.70%)
  • Gold

    +2.80 (+0.16%)
  • Silver

    +0.25 (+1.13%)

    -0.0003 (-0.03%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    +1.57 (+8.24%)

    -0.0018 (-0.15%)

    -0.0210 (-0.02%)

    -319.88 (-1.85%)
  • CMC Crypto 200

    -9.79 (-2.38%)
  • FTSE 100

    -12.98 (-0.17%)
  • Nikkei 225

    +65.47 (+0.24%)

Save Money Annually by Asking These 7 Questions Before Making a Purchase

Antonio_Diaz / iStock.com
Antonio_Diaz / iStock.com

There are all kinds of shoppers out there: people who meticulously plan for everything they’ll buy and make sure the money is in the budget, people who impulse shop whenever they feel like it and a lot of folks in between. On average, Americans spent $183 on impulse purchases each month in 2020 — a whopping $2,196 annually that you could bank, save or put toward other purchases — according to Andrea Woroch, a nationally-recognized consumer savings expert, who cites a survey by Slickdeals. Whether you plan your purchases or tend to impulse shop, here are some important questions that could save you a lot of money if you ask yourself them before you buy anything.

Check Out: Where and When To Shop To Save Money on Electronics
More Tips: 10 Ways To Save Money in March

Do I Need It?

It may seem like an obvious question, but many people don’t ask themselves this basic question, according to Alissa Krasner Maizes, a financial planner, attorney and founder of Amplify My Wealth’s investment advising firm.

“If you are looking to save money, sticking to your needs rather than your wants can make a big difference at the end of the year. Imagine if you spend $3,600 a year on clothing and $1,800 on eating out. When focusing on needs-only spending, since many purchases in these categories are considered discretionary, you can potentially save up to $5,400,” she said.

Can I Afford It?

Another basic but necessary question requires you to get honest about your budget — which of course, means having one in the first place.Whether shopping for a need, want, or a splurge, asking yourself, ‘can I afford it?’ can positively impact your savings goals,” Maizes said.

She said that a budget can empower you “to make decisions that align with your financial plan. Although some people may think of it as restrictive, it allows you to have the strength not to have regrets and make decisions that are well thought out rather than impulsive.”

Good To Know: These 14 Grocery Stores Are the Worst for Price Competitiveness

Is There a Less Expensive Alternative?

Though there are some items where it’s just worth the money to pay for the brand name, the latest model or a pricier version or model, in general, Maizes said, did you look for less expensive alternatives before purchasing?

She recommends some money-saving tactics to consider before making a purchase: signing up for texting or emails for a discount, searching for coupons or rebates, waiting for a sale, or when shopping online looking for online cash-back shopping portals that the business is aligned with.

“Over time adopting these questions into your money mindset thought process can help you save on everything from food and subscriptions to automobiles, entertainment, vacations, and home, leaving your savings potential up to you and your discipline,” Maizes said.

Find Out: 12 Household Items You Should Be Replacing Regularly — And How Much It Costs

Is There a Used Option Available?

Along the same lines, Woroch recommends looking for used goods when possible, from clothes to furniture to toys. She recommends resale sites that specialize in particular merchandise to help you save. You can find gently used clothing for the whole family at Swap.com for a fraction of regular retail, high-end secondhand designer handbags at The Real Real for affordable prices, refurbished smartphones at Declutter, refurbished kitchen gadgets and power tools at eBay or gently used home furniture via Facebook Marketplace. “I recently found a bedroom dresser on Facebook Marketplace for $165 which looks very similar to a new style I was tempted to buy for $799,” she said.

Did I Compare Prices?

Before you buy anything, always run a quick comparison online to see if you can find the item you’re about to buy for less, Woroch urged. She likes the barcode scanning app ShopSavvy, which provides instant price comparison when you’re shopping in stores. Another she recommends is the PriceBlink browser extension, which provides price tracking when shopping online to find the most affordable option.

Comparisons can extend to bigger expenses, like auto insurance, as well. “In fact, the 2017 Driving in America Report found that more than 1 in 3 Americans who didn’t compare auto insurance costs over a three-year period missed out in $416.52 a year in potential savings. Use insurance comparison sites like TheZebra.com to pinpoint the cheapest provider without sacrificing coverage.”

How Often Will I Wear or Use This?

If you are planning to purchase something that isn’t exactly cheap, it may still be worth it if you’ll get a lot of use out of it, Woroch said, such as a piece of clothing or shoes. “Calculate the cost per wear or use to determine if a potential purchase is worth the cost. For example, it’s worth spending more on a high quality pair of black boots that you will likely wear multiple times per week for a couple years since the cost per use will be extremely low. On the flip side, dishing out a few hundred bucks for an item you won’t wear much or use often isn’t.”

How Does This Fit Into My Long-Term Financial Plan?

Financial coach Paul Scarfone, founder of DollarWhys, believes it’s important to be intentional with financial decisions, and to make choices that support goals now and into the future. By asking ‘does this support my goals?’ you may be more likely to pause an impulse buy and put that money into a savings account or toward a necessity. For every purchase, he also recommends you ask, “If I say yes to this, what am I saying no to? What opportunity/s am I going to miss by doing this?”

More From GOBankingRates

This article originally appeared on GOBankingRates.com: Save Money Annually by Asking These 7 Questions Before Making a Purchase