海角大神

What鈥檚 the single most important piece of personal finance advice you would give a person?

I鈥檝e heard this question (or variations on it) many times. I have a very simple answer to it.

Whenever you buy anything, .

That seems really off the wall at first glance, but I firmly believe that no single piece of advice can match it in terms of getting your money under control.

I鈥檒l show you what I mean through the lens of three purchases I considered recently.

I have about $1,000 saved up for a big personal purchase. I had been considering buying an iPad with it, even before the Apple announcement in January. I held one in my hands a couple days ago and considered it.
Why do you want an iPad? It鈥檚 an impressive gadget to hold in your hands. I can see myself using it and enjoying it.
Why would you use it? I can surf the web on it and read books on it and periodicals, too.
Why not just use your laptop? This is more portable.
Why not just use your iPod Touch? 鈥�
Why not just read a paperback? 鈥�

And, boom, my argument for buying an iPad goes down the chute. Sure, I can afford it, but why? It doesn鈥檛 fulfill a need in my life that isn鈥檛 already fulfilled by something else, or at least not in a compelling enough way to pay hundreds for it. Yes, I鈥檒l probably buy a tablet computer someday, but not yet. It doesn鈥檛 actually fiil any sort of need.

I allow myself $30 a month to spend on books. I was in the bookstore recently, considering whether to pick up a copy of a novel I鈥檝e been looking forward to for a long while.
Why do you want this novel instead of the books you already have? It offers a compelling story, but I do already have a few to read.
Why not just wait until it鈥檚 on sale or in paperback? I want to read it now!
Why not just ask for it on PaperBackSwap? It鈥檒l take some time to get it there because it鈥檚 such a new release.
Why not just request it at the library? I could do that鈥� it might take a few weeks.
Why not see if one of your friends has picked it up and swap with them when they finish? Even if the library doesn鈥檛 have it, one of them might.

And, boom, I鈥檝e got several avenues for reading the book without spending the money. This keeps me from buying a lot of books because my actual need (to read) is fulfilled in other ways for much less cost.

Another example: I鈥檓 considering buying a one pound small wheel of Maytag blue cheese at the store.
Why are you buying this cheese? I want to make some good blue cheese burgers and I want some to sprinkle on my salad.
Why are you buying a pound for that? It鈥檚 cheaper per ounce.
Why would you let the eight or so ounces you won鈥檛 use go to waste? I, uh, wont?
Why not get feta for your salad because it鈥檚 cheaper and tastes more appropriate? Hmm鈥� that seems reasonable.
Why not just get a four ounce piece of the blue cheese? 鈥�

And there you have it. Instead of buying the one pound chunk, I bought a four ounce chunk and some feta.

In each example, I came up with a result that either made me realize I didn鈥檛 really need the item at all or pushed me to another purchase that met my needs for a much lower cost.

The five whys push me there every time. The simple process of thinking through a purchase almost always leads me to a better solution that my first impulse points me to. This saves me money and prevents me from making impulsive, wasteful buys. Instead, I find I have plenty of money left for the things that really do matter in my life.

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