Every time you spend money, you choose your future.
Will this purchase bring lasting value to your life, or is it just a fleeting desire? Will it move you closer to financial security, or set you back?
Modern marketing doesn’t want you to stop and think about these questions. Brands are masters at making you feel like you need something right now. They use scarcity tactics (“Only a few left”), urgency (“Sale ends at midnight”), and social proof to create a sense of FOMO – fear of missing out. The goal? To get you to spend before you’ve had a chance to consider whether it’s truly worth it.
But here’s the reality: money is a limited resource. The dollars you spend on impulse purchases are dollars you won’t have for the things that truly matter—your savings for that dream home, your superannuation for a comfortable retirement, or your child’s education fund. Every dollar saved brings you one step closer to your most meaningful life goals. So, before you make any major purchase, pause and ask yourself: ‘Is this really the best way to spend my money?’
The Five-Question Test Before Any Major Purchase
- Do I actually need it, or just want it?
Be honest with yourself. Is this a necessity, or are you caught up in the excitement of wanting something new? Would you still buy it if you weren’t influenced by advertising, social media, or peer pressure?
We live in a culture that encourages upgrades, the newest phone, latest fashion trends, and the fancier car. But before you commit, assess whether this purchase truly adds value to your life or if it will delay important milestones like homeownership, debt freedom, or early retirement.
- Can I afford it without debt or financial strain?
It’s easy to convince yourself that a large purchase is “worth it” because of financing options or buy-now-pay-later schemes. But debt can be a trap that keeps you working longer and postpones your most cherished life goals.
A good rule of thumb is that it may not be the right time if you can’t buy it in cash (or pay off your credit card in full at the end of the month). Instead, consider saving up for it and making the purchase when you can do so comfortably, keeping your broader financial plans intact.
- Have I researched my options (and considered alternatives)?
A little patience can lead to big savings. These savings can compound over time and bring your dreams within reach faster. Before making a major purchase, take the time to explore all your options:
- Compare brands, models, and prices. Not all products are created equal. Look at different brands, features, and price points to ensure you get the best value.
- Look at online reviews and user experiences. Reading reviews can help you spot potential issues before you buy. Check independent review sites, customer feedback, and product comparisons to make an informed decision.
- Check for upcoming sales, discounts, or second-hand options. Timing your purchase around sales events or shopping second-hand can result in significant savings that can be redirected toward your future goals.
Retailers rely on impulse buys. But when you take the time to research, you increase your chances of getting the best deal and avoid buyer’s remorse.
When researching your purchase, don’t just look for the best price, consider whether an alternative solution could save you money while still meeting your needs:
- Buy second-hand. Platforms like Facebook Marketplace, Gumtree, or op shops offer quality items for much less, freeing up money for your long-term aspirations.
- Rent or borrow. If you only need something temporarily, renting or borrowing can save money that can be invested in your future instead.
- Repair instead of replace. A repair, deep clean, or small DIY fix can make an old item feel new again and keep your financial plans on track.
- What is the cost of that?
Every dollar you spend is a dollar that could be used elsewhere, perhaps toward something far more meaningful in your life journey.
For example, spending $3,000 on a new couch might mean delaying a home deposit, investing less in your children’s education fund, or pushing back your retirement date by months or even years when considering the compound growth that money could have generated.
A helpful mindset shift: Instead of just asking, ‘Can I afford this?’, ask, ‘What life goal am I delaying by choosing to buy this?’
- Will I regret this in six months?
Think back to past purchases you thought would bring you lasting happiness. Do you still use them? Do you still love them? Or would you rather have that money in your savings account, working toward what truly matters to you?
A great way to test your decision is to use the ’30-Day Rule’. If you’re considering a major purchase, write it down and wait 30 days. If you still genuinely want and can afford it after a month and you’ve considered how it fits into your larger life plan, it’s more likely to be a worthwhile investment.
Your Spending Shapes Your Dreams
Spending money is inevitable, but how you spend it makes all the difference. Every purchase you make shapes your financial future, either pushing you closer to your vision of an ideal life or pulling you further from it.
The small decisions you make today: saving an extra $50 a week, contributing more to your super, or avoiding unnecessary debt, can compound into life-changing outcomes. From being able to buy a home sooner, take that dream family holiday, help your children through university without debt, to retire years earlier than you thought possible.
So next time you’re tempted to splurge, remember: the best financial decisions aren’t made in the heat of the moment. Give yourself time to think, weigh the trade-offs, and ensure your hard-earned money truly serves your most important life goals. Your future self will thank you.
If you want to make smarter financial decisions and align your spending with your long-term dreams, consider speaking with a qualified financial adviser who can help you create a plan that works for you and your future.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
