Saturday, October 16, 2010

Before You Buy...

Before you buy anything, go through this checklist!

Recently, I sold a lot of stuff on eBay, Craigslist, and at Garage Sales.  Some of my friends think, "Gee, you made a lot of money that way!"  And they would be dead wrong.  All I did was not lose as much as I could have by throwing things away - or worse yet, keeping things like a hoarder until they were worthless.  By selling off old junk, I merely ameliorated a loss, not created a profit.

A lot of the stuff we sold were things that, at one time, we felt we had to have and now look at and say "what were we thinking?"   These items represent a squandering of capital and moreover a cluttering of our lives.  Each unnecessary and unused purchase represents labor lost, opportunity lost, and another hour, day, month, or even year of work to do, before we can retire.

"Shopping" as I have noted, is a self-destructive habit - as bad as gambling.  When you "shop" you buy things - by definition - that you had no intention of getting when you set out.  Purchasing things you need, from a list of needs, carefully researched, is one thing.  Going to the store to "see that they have that I might like" is shopping.

And again, this is related to the hunter-gatherer instinct in our brain, that says "gather those nuts and berries, and those medicinal herbs, you might need them, cavewoman!"  And traditionally, gathering was a woman's job, which may explain why more women than men "shop."  Cavemen dragged home the mighty mastodon after the hunt.  Today, they drag home the mighty SUV from the car dealer.

The problem for modern humans is that, unlike our cave ancestors, we have to pay for our hunter/gatherer behavior.  There were no credit card swipe machines back in cave man days.  You saw nuts and berries - you took them.  You saw a mastodon, you speared it.  Today, we have to make monthly payments on our conquests.

As a result, we end up squandering our incomes in response to some deep-wired need in our brains to accumulate "Things".  And often, these are "Things" we don't really need or want - or want for long.

Before you pull out that credit card and run it through the swipe machine - for any purchase - or before you sign those loan papers on a car, ask your self these ten simple questions:

1.  Do I Really Need This?  Always ask yourself this question.  Things like food you can always argue that you "Need" - but if you are over-buying and over-eating (like most Americans) do you really "need" it?  I have to admit that the other day, I impulse purchased some bag of cracker things at Wegmans, only because they had a display of them.  It was not on our list, and even though they were only 15 calories apiece, I did not "need" them.

For most items that are not food related, the question is easier.  Yes, you might "need" clothing and shelter.  But do you need yet another shirt, when your closet is already full?  Do you need a "luxury" over-sized home for two people?  You might "need" a car, but do you need a Lexus?  Paying double or even triple for basic necessities just for status reasons, is a sure way to end up broke.  Unless you have a million dollars in the bank, you aren't "rich".  And just because the bank says you can afford the payments, doesn't mean you really can afford the dent in your lifelong income.

2.  Can I Pay Cash For This? Get in the habit of paying cash - or using a debit card - for all purchases.  People accumulate credit card debt the same way they become overweight - a little bit at a time.  When you start ringing up items on a credit card, you may end up taking years to pay them off.  So if you don't have the cash in your wallet, and you don't really need it, why are you buying it again?

This is even true for so-called "big ticket" items.  By age 40, you should be able to save up money so that you never have to finance a car for the rest of your life.  If you can't, ask yourself why.  A good, late model, secondhand car can be had for not a lot of money.  If you have to borrow to buy, chances are, you are buying more car than you need.  If you are borrowing to buy a "status" car, all the more worse for you.   If you don't have the cash - don't buy!

3.  Where Will the Item Go?  Never buy an item without knowing exactly where in your home it will go - EXACTLY.  The average suburban home in America has a garage full of boxes of stuff bought at "big box stores" that people dragged home (cavemen, again) and then never figured out where to put.   Once you start thinking about where something will go in your home, chances are, you will start realizing that instead of being an asset to your life, it will just be another item of clutter that you don't need.  If so, don't buy it!

4.  How Long Will I Realistically Keep It?  There are some things that we buy and have for decades - very few things, it turns out.  Most of the junk we get ends up going to the curb in short order.  When looking at an item for sale, think not just about the initial rush of taking it home and unpacking and using it, but the whole life-cycle of the product.  A lot of items, gadgets in particular, end up getting used for a while and then languish in a closet for a few years, before they are broken, the parts lost, and eventually, they go to the curb.  Thinking about the product cycle helps dampen your enthusiasm for buying.

5.  Is this a "Souvenir" or "Memento" Item?  When traveling, it is temping to shop at the souvenir shop.  But much of the junk you buy at these places ends up in a drawer or box somewhere, never to be used.  Even functional items like t-shirts and mugs are superfluous, if your closet is already jammed with t-shirts and your cupboard filled with mugs.  And in many cases, a lot of souvenir stuff is so ugly that once you get it home, you wonder why you bought it (we all do this, too!).  And of course, the "funny slogan" on the t-shirt that seemed so risque while on vacation, just seems vulgar and obscene once you get it back home.  Leave the souvenir shops to the chumps and tourists.  Want memories?  Take a digital picture, it's free.  Or just experience where it is you are at, and enjoy it.  Because when it gets down to it, not many people really care about your vacation, other than you.

6.  How Will I Dispose of This Item?  Along the lines of #4 above, keep in mind at all times how you will get rid of the item you are looking at.  Yes, it is hard to think that you will EVER want to get rid of that Presto Fry-Daddy that caught your eye at Sheets 'N Things, but chances are, down the road, you will dispose of it somehow, either after it has lost its allure to you, or when it inevitably breaks.  Again, thinking about the product cycle from start to finish, will help you appreciate the totality of what you are purchasing - over time - and perhaps force you to re-think the entire process.

7.  Am I Buying the Item Because of Price Alone?  "This is such a good deal, I can't pass it up!" people say - and say a lot.  This is particularly true today when things are made so cheaply in China that it seems like they are nearly free.  But nearly isn't free.  And over time, these small purchases run up your debts and then clog your home.  One reason such items are a "bargain" is that no one else wants them - and you likely won't either.  Or, they are poorly made and will not last long.  Garage sale items can be astoundingly cheap this way - mere pennies, or so it seems.  But before you know it, you've loaded your car up with someone else's trash and are handing them twenty dollar bills.  If you don't need it, it isn't a "bargain" no matter how low the price - even free.

8.  Is It a Gadget?  Gadgets can be a lot of fun, but many of them are just junk - let's face it!  The allure dies off quickly, and you are stuck with this thing you bought, loitering in a kitchen drawer, its batteries no longer taking a charge.  You don't want to throw it out, because you "paid good money for it" and "it still works, sort of".  Cut to the chase and just don't buy these things in the first place.

9.  Is It "On Sale?"  This is related to #7 above.  Sale prices are often meaningless, as most stores these days are perpetually having a sale.  Clothing is made incredibly cheaply overseas, and costs very little.  Stores mark it up to astounding prices and then offer "70% off!" as if you are making the killer deal of the century.  As I noted in my A Trip To The Mall posting, I got snookered by this, paying $16 for a pair of pajama bottoms, on the premise that they were "70% off!".  Of course, who in their right mind would pay $53 (the regular "list" price) for a pair of pajama bottoms that were sewn together in India for 69 cents and even with freight, cost the company maybe $3.  Heck for $53, I can buy a microwave oven - a nice one!

Comparing prices based on artificial mark-downs is foolishness.  The "retail" price is a made-up number, and their "markdown" is no indicia of any real savings.  To compare prices effectively, you have to compare quality and price to the goods from another merchant.  You cannot shop prices within the same store - it is a false savings.

10.  Do You Already Have One?  This may sound silly, but I have known people to buy things they already own, on the premise that "Well, I can't find it".  So they buy another one.  They can't find that gadget they bought last year, because their home is so clogged with junk that they can't find it.  So they spend $89.95 on a new one - and end up with two.  It this is happening to you, then step back and say "wait a minute" and start cleaning out the clutter in your life.  Buying multiple copies of an item because you can't keep track of your things is only going to make things worse in the long run, as you slowly drown in a sea of junk.

* * * * *

As Americans, we are very lucky people - to be able to live in a country which is wealthy in so many ways.  And yet today, many middle-class people claim they are "unhappy" with the economy and their lives.  And one reason for this is the mad rush to over-consume. Suburban mini-mansions are stuffed full, not with quality furnishings and treasures, but rather with small crappy purchases from big-box stores, all financed on credit cards.  People take on staggering credit card debts to pay for meals at chain restaurants or for gadgets and "sale items" at the mall.  They buy new luxury cars every three years and never, ever, are out of sight of the next payment.  They never actually own anything - they just owe everyone.

And the sad thing is, it is all so easily preventable.  And yet most of these people want to blame the "government" or the political parties for their woes.

Get off the consumerist bandwagon.  Buying things isn't living.