Buy Smartly

 

Buy Smartly

This time too Anand agreed to write-up the gist of the free-wheeling talks between the multi-millionaire Kalidas and a group of about 20 persons, including Anand, who were interested to learn from their mentor. Here’s that write-up:

Buying things

When you know what and why you’re buying things, you grow conscious of how your spending habits evolve. For example, if you adopt a concept of needs, wants and desires; you can categorise each purchase accordingly. You will be aware of how much you are spending on items of desire, for example.

Some of the things you bought regularly as wants make you think they are now needs. As someone named Sebastian Junger said, “Comforts, once gained, become necessities.”

How do I know if I'm buying something unnecessarily?

In the past, I have counselled a couple to adopt a method so that they could manage their emotions better and reduce or avoid impulse buys.

What is the method you told them?

Members of a household discuss and agree to a threshold amount, say, Rs. 1000. If the husband wants to buy any items that are not daily necessities, he has to discuss with his wife if the item costs more than Rs. 1000. Basically, this helps to think it over before deciding to buy high-priced items.

What is the benefit of following this method?

You'd be surprised; how many times the couple decided not to buy; or to buy a better alternative or manage with a substitute they already possessed. The very fact that a spouse must discuss and both should agree avoids or delays the purchase.

An additional feature of this method is it reduces arguments between husband and wife!

Any other methods, sir?

Before you buy something that is expensive, give yourself a ‘cooling period’, a pause, of at least 2 days. After two days, if you still think you must buy, ok, go ahead. Often, however, after that delay, you would find you are not keen on the purchase, after all. This method teaches you not to act on impulses.

Oh, ok. You are saying many purchases are made on impulse and could be avoided by this method. Right?

Yes. As the saying goes, "A penny saved is a penny earned. And the habit of discussing with the spouse and arriving at a consensus is also a good one. "

Thank you, sir, now I can understand and appreciate what you are telling me. 

Are there any other 'hacks' on intelligent buying?

There are many such 'hacks' as you call them. I remember telling a relative of mine not to buy anything (other than fruits and vegetables) from door-to-door vendors. Instead, make a habit of buying from reputed retailers, preferably when they offer discounts.

Another more important point is to keep your credit card at home when you go shopping. People tend to buy more when they use credit cards. That’s because, it feels as if they are not spending a lot of money.

Sir, a final word of advice to end this session?

Well, before you buy high-value items, you are comparing costs of different offers. However, remember also to work out the lifetime cost of the product. If you make it a habit to estimate the lifetime cost and the opportunity cost, I am sure many a time you would decide not to buy.

That’s all, till the next meeting …