I always feel a rush of optimism at this time of year. It's a good time to tackle the big areas of life, and after the holiday season, the one area that probably needs attention more than most is personal finances. With January credit card bills hitting your mailbox right about now, you're probably wondering how to stop spending money on unnecessary things and save more for that next renovation, that next trip.

Managing Your Personal Finances

It's definitely a question I'm thinking about. I have a degree in Finance and am a spreadsheet wizard so I tend to manage the money in our household. I find most people are intimidated by the subject but the truth is, creating budgets and tracking expenses and monitoring investments are NOT the hardest thing about getting control of your finances.

The hardest thing? Knowing how to stop yourself from spending money in the first place.

It's especially true at this time of year. It's January, you didn't find that thing you really wanted under the tree, and post Christmas sales are still happening and everything is 50% off.

It's tempting. REALLY tempting.

And you've heard all the good advice before, about how you should change your money habits and how saving early allows you to reap the benefits of compounding interest over time and how you should think about your future 70-year-old self and what that person would want you to do right now.

... but NONE of that matters when you're on the Wayfair website and find a side table that would look so good beside your bed and it's 65% off and before you know it, it's sitting in your virtual cart.

I've been there.

That moment - when you're about to hit "confirm purchase" or when you're about to hand the cashier your credit card - is your most financially vulnerable.

We all know the feeling, the rush of anticipation as you make that purchase and how life instantly seems better because now you have that sweater/rug/Instant Pot/bracelet/pair of boots that was destined to be yours.

But what if we changed the script?

What if, instead of getting carried away and thinking you will be powerful after the purchase, you feel powerful about your money before it even leaves your hands??

YOU can do that. You can do that by digging deep and deciding if the value of the thing you're about to purchase is greater than the value of those dollars sitting securely in your wallet and providing you future peace of mind.

Here's 7 questions to ask yourself before you pull out your wallet:

1. Do I Need This Today?

Is this something you need today? If you need it, can it be purchased tomorrow or another time? One good approach is to wait 24 hours before you make significant purchases. Delaying the purchase decision can create breathing room. You'll either find that, yes, you have an immediate need and have to purchase the item right now, or you'll see that you were reacting to a spur of the moment impulse and don't need the item after all.

2. Did I Need This Yesterday?

Real needs are typically formed over time and don't just appear instantly. Ask yourself if you needed this item yesterday, before you saw it in store. Or did you suddenly feel you needed it because it came into your consciousness and was presented to you? Consider if there's higher priority existing needs that you should spend your money on instead.

3. Do I Already Own Something That Does The Same Job?

This is one of the more difficult questions to be truthful about. We are all attracted to things that are shiny and new. A cozy Sherpa sweater, just right for this winter weather. Trendy boots that you've seen everyone wearing. New baskets and trays that you are convinced will help you be more organized.

Before you buy that next thing, take a look around and see what you already have. Shop your house and wardrobe and see if there is a similar item that can be repurposed or reused. In the case of household furniture, moving an item to a new spot might be enough to make it feel novel and new. Or, update the piece with new paint, new fabric, new handles and give it a second life. Sometimes, what we crave is not something "new" but just a refresh or a change.

4. Is This A Want Or A Need?

Wants and needs seem almost interchangeable but when you're trying to control your spending, you really need to make the distinction between them. Harvard bankruptcy expert and US Senator Elizabeth Warren in her book All Your Worth suggests allocating your budget 50% to your needs (the things you need to survive), 30% to your wants (things you desire), and 20% to savings. I find that to be a very logical and manageable approach.

That's not to say you shouldn't ever splurge on yourself. But you should be conscious of how you're spending your money and your habits. Do you routinely go overboard with your wants? Do you not have enough put away in savings? Ask the question and check your behaviour.

5. Would I Regret Not Purchasing This If It Sold Out Tomorrow?

Occasionally, factors beyond our control impact our buying decision. Examples would be when there is a time-limit or limited inventory that would prompt you to buy sooner rather than later. This is a challenging question because when something is about to sell out or is only available for a short amount of time, it can create an overpowering desire in us to buy it right now - even if its not something we actually need. We don't want to pass up the opportunity and miss out.

To give you more perspective, ask yourself how regretful would you really be if that item sold out? If the answer is not that much, then be okay with letting that good deal pass you by.

6. How Can I Save On This Purchase?

No matter what you're purchasing, it's always a good idea to see if there is a way to save even a few cents. I'm not suggesting you start hoarding coupons (but good for you if you do!), but there are usually quick and easy ways to save some money. Here's a few suggestions:

• Can you get a discounted price for buying tickets for attractions or events ahead of time, instead of at the door?
• Before you purchase online, use the Honey app to automatically find you discount codes. I use the app each and every time I make an online purchase. Not only does it find discount codes, I gain Honey gold rewards points redeemable for additional gift cards.
• If you're Canadian, can you save by shopping cross-border? Sometimes, you'll find shopping from a US site is cheaper, even taking into account shipping and duties. I've used a package forwarder when purchasing from strictly US sites (see this post for my money-saving tips for Canadians)
• Sign up for the retailer's newsletter before you shop. Often, you'll be rewarded with a new customer discount code that you can use on your next purchase online or in store.

7. Can I Put This On The List For 'Next Time'?

If your purchase isn't urgent, consider waiting to buy. In doing so, you can bundle several purchases at the same store together next time and possibly take advantage of bulk savings or discounts. You'll also give yourself time to re-think the purchase and confirm it's something you really need. Finally, you can also set alerts on apps like Honey which can notify you of price drops on shops like Amazon, Target, and Walmart and purchase when the time is right.


These 7 questions might seem complicated, but in reality, you can answer them pretty quickly with a Yes or No answer. And when you're there at the checkout, with your credit card already in your hand, you've only got a split second to decide!



To help you decide and keep these questions in mind, I've created this FREE handy business-card sized print out for your wallet. Cut out these questions and tape them inside your wallet, or even directly on your credit card. It's a great reminder to pause and reflect next time you make a purchase.