close
Advertisement

How To Make Good Financial Decisions

Is it time to spend, save or splurge? Here are the six most basic questions to ask yourself each time you open your wallet.

Savings
Thinkstock
Advertisement

Can I afford it? This should be the first question you ask when reaching for your credit card. If you have to borrow money to make the purchase, then you probably can’t afford it. Another strategy involves calculating how many hours, days or weeks at work it’ll cost to pay it off.

Is this a need, or a want? Before making the purchase, create a mental list to see how much use you’ll get out of it and whether this is a need or simply a want.

Are there hidden or ongoing costs? Often the spending doesn’t end with the initial purchase. For example, buying a car involves extra costs such as registration, maintenance and repairs. Be aware of how these will add to the total cost.

Will this purchase appreciate/depreciate? New gadgets such as mobile phones often depreciate, so sometimes it’s better to wait before grabbing the latest model.

Is it good value? While the cheapest option is tempting, it doesn’t always pay off. For example, if you spend less on a dishwasher or washing machine, you may end up paying more in regular repairs.

Will it pay itself off? An investment property can create a rental income, which can help to pay off a loan. Consider the big picture when making decisions – sometimes you need to spend money to make money.

Source: BT Financial Group



Advertisement

More in Money

You’re wasting your money if you’re buying these 14 things in brand-new condition

You’re wasting your money if you’re buying these 13 things in brand-new condition

Used items can be the same great quality at a fraction of the price.
Building a happy retirement

Building a happy retirement

Viewing retirement as being a time of endless opportunity is the first step, says retirement expert David Kennedy. And if you're looking to start a business but think you're too old – think again: experience, networks and resilience are just three valuable qualities you can bring to the entrepreneurial world, writes Danielle McCarthy.

13 Things You Should Know About Negotiating

If everything is negotiable, here’s how to get the best outcome.
Will we still need cash in the future?

Will we still need cash in the future?

Is it possible to leave home without any cash? We take a look at some of the cashless options available in Singapore and Malaysia
5 ways to cut your energy and water bills

5 ways to cut your energy and water bills

Just a few simple adjustments can help keep your bills in check
Advertisement