Treat Every Purchase Like and Investment

 

Back in August U.S. News sent me an email with an interesting subject line.

“Treat Every Purchase Like an Investment”

OMG!  What great clickbait!  The email contained various article links discussing credit, loans, budgeting and etc.  However, the title is what stuck with me the most.  It made me think.

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What if I treated regular everyday purchases like I was investing?

How would I shop differently?

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That is an intriguing thought, because, to be honest, sometimes I have shopped rather mindlessly, due to boredom or wanting “retail therapy”.  Maybe you have done the same.  However, what if I/we considered our normal buying as investing?  Since well…it really is.

When we buy groceries, gas, clothing, concert tickets, we are making an investment in those items or activities.  For that reason we should consider their rate of return (what we gain from the investment) and opportunity cost (value of what you have to give up in order to choose something else).

One of my favorite thoughts is, “You can only spend a dollar once.”  We know the money spent on groceries is no longer available to spend on anything else.  As we spend, save or invest, we have to consider if our actions are the best use of our dollars.

So, how do we “invest” daily?  Well here are my FIVE tips for getting you started.

Eliminate or Reduce
Work on eliminating, at least reducing, shopping for therapy, out of boredom or habit.  Also remember, just because it’s on sale, doesn’t mean buy it.  I am thinking specifically of a food processor I bought and have yet to process any food with it…LOL. The key is to think about why you are buying.  No one likes when others waste their money, let’s not be guilty of wasting our own money either.

Give Your Money Purpose
Dave Ramsey said something like “name your money”, meaning every dollar you get or have, should have a name or purpose.  Whether it’s to buy food, gas, save for later or invest for retirement each dollar should have job to do.  This is one reason a wealth management plan (aka budget…LOL) is so important.  It allows you to pre-plan your dollars, and give them a purpose.

Build in Splurge Moments
I am a true believer in enjoying your life, and the fruit of your hard labor.  Working solely to pay expenses or save can grow frustrating.  So I have a splurge or fun money fund.  It’s money I spend on me to show myself some gratitude for working hard.  This isn’t an extravagant thing.  Sometimes, it is only my favorite candy or going to a poetry show.  Other times it is a special donation to a charity.  It’s money you can spend on things that bring you joy.  A way of celebrating yourself for your hard work.

Consider the Cost
I spoke earlier of the term opportunity which is the opportunities we give up in order to take advantage of something else.  Think about the dollars you use to spend, save and invest.  Would your funds be of better use paying down debt, building savings, investing for retirement or going on vacation?  There are situations in your life where each one of those options could be the right choice for you.  Before you say “yes” to purchase, think about what you are also saying “no” too.

There is No Perfection
Let’s face it.  We won’t always make the right choice with our no matter how hard we try. Flashback to the food processor stuffed in my cabinet…LOL.  We can only really strive to do our best.  Perfection never a true possibility.  Sometimes, we will be wrong, and it may cost us.  Do not beat yourself up about it (too much).  Forgive yourself and any others involved.  Learn from it.  Grow from it.  Do your best to recover from it and then…keep moving forward.  Don’t quit.  Work to do better next time.

Shopping Tip:  Keep your receipts and item packaging!  Also, be aware of the retailer’s return policies and use them.  Buyer’s remorse is real, so have no shame in making a return.

Those are my tips.  I hope they are of value to you.  Do you have a favorite on the list above?  Or maybe have a tip to share.  If so, I would love to hear it, contact me here or on Facebook via a post comment or messaging me.

“You don’t want to climb out of debt only to fall back into the trap again. Treat every purchase like an investment.”
– Tony Drake, CEO of Drake & Associates in Waukesha, Wisconsin.

Until next time…

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