The Shopping Tip You Need to Save Money Right Now

Clipping coupons and buying at consignment stores are awesome ways to save money, but there’s another shopping tip that can save you even more—and you don’t need scissors for it.

It’s simple—before you make a purchase, ask yourself “Is this a need or a want?” Making that call can keep you from overspending on everything from groceries to the boots you saw on sale yesterday. It’s a small decision, but it makes a big difference with your money!

Deciding Needs vs. Wants

A need is something like food, clothing or gas for your car. You use everything you need, which justifies the cost. A want is a new purse—not because the old one is worn out, but because the new one matches your shoes better.

You’ll need to be careful to not accidently label wants as needs. It’s tempting to think you need a new sofa if your old one has a scratched leg or a coffee stain on the cushion, but a couch is a want. Cover the spot with a strategically placed blanket while you save for a new place to sit.

How to Apply This Tip

The next time you see something in a retail store you want to buy, ask yourself if it is a need or want. If it is a need, check to see if you’ve budgeted enough for it. If so, go for it!

If it’s a want, put it back on the shelf and take these two steps.

1. See if the item fits into your budget. If you’re excited that the fancy coffee maker is on sale, check to see if you will have money left in your budget after factoring in your monthly needs. That keeps you from making spur-of-the-moment purchases that derail the rest of your month.

2. Wait a day before buying. A 2016 survey reports five out of six people admit to impulse spending—with 54% of them forking over $100 or more! That kind of shopping leaves you with less money for more important purchases. Wait 24 hours to see if you still want the sunglasses or floppy hat. Then, once you calmly decide that it’s a good buy, work it into your budget.

Separating needs from wants helps you focus your day-to-day spending and keeps you aligned with your bigger money goals—like saving money. And that’s a win-win.

Having a plan for your needs and wants is easy with EveryDollar. Create your budget in less than 10 minutes!