There are times that offers they cloud our good judgment when buying and we end up buying products that we may not need, we may not use them and they prevent us from meeting our savings goals. Sales periods usually take us to spend money more uncontrollably with the excuse of lowering prices.
To prevent a bad purchasing decision, made impulsively, from negatively affecting our financial health, we can apply a trick not only in these periods where consumption increases, almost inevitably; but in our day to day, especially if we tend to be compulsive buyers.
The finance expert and podcast host My Millennial Money, Glen James, explain this simple gesture. It consists of taking our annual income as a reference to calculate whether or not we should buy that object or product that we want impulsively.
Wait a day to make the purchase
As James explains, when we want to buy something that costs more than 1% of our gross annual salary (or our total income, if we have more sources of income), we will have to wait a day to buy it. It seems silly, but this technique will help us cut down on bad purchasing decisions.
This 24-hour period gives the buyer a chance to think about this purchase: Do I really need what I want to buy? How much am I going to use it? If in the end we discover that it is something that we really need or want, go ahead with the purchase. But if we discover that the need to buy it was based on an impulsive act to get some momentary satisfaction, the fact that we waited a day will help us avoid spending our money unnecessarily and thoughtlessly.
James points out that this percentage works if you earn less than 183,000 euros per year and you do not have debts or if you do, the payments are manageable and controlled. If, due to our level of income, we consider that 1% is too high a percentage, it can even be reduced. In the end, the trick is to think about the decision and not buy impulsively.
