You come home from office and wife starts the pep talk… Winters on the way … we need a room heater this time… you know last time you said “this is the last stretch and winters will be over soon”,… and it continued for another 15 days… not this time, please. And probably you are again thinking should you buy it or again postpone this year… This is just another classics of life when you have to commit a purchase or postpone it or completely reject it. And if it is a repeated demand of family (especially your wife) you need to explain the logic of your decision. But my point is how do you make a purchase? Do you purchase everything as per availability of money? Means you just say yes, when you have money and you reject when you are short of funds. Do you think this is the right way?… No for sure, if you don’t want to convert your house a warehouse of China made plastics and multiple obsolete equipments.
The Decision Making Process
How to take a decision to do or not to do something is actually a science.
Several theories called by the name “Decision Making Theory” have been part of literature related to management and marketing. Remember the 8 steps of making a decision- identifying the decision, gather information, identify alternatives, gather facts for each alternative, list pros & cons, identify the alternative, take action & finally review the action.
But is it really so complex… especially the buying/incurring expense decisions?
The Layman’s Way to make Buy or Postpone Decision
My family has always been a middle class as we were not made by economics policies started by Sh. PV Narasimha Rao in 1991. My grandparents were way ahead of time in terms of thinking as they were conversant with English, and read a lot especially my grandfather. And one of the learnings he gave me was – how not to be lured by the marketers. He said “don’t let them sell, you buy”. This means I had to be sure of what I want and what I wish to buy. And when I made mistake, he laid a simple process which I am going to tell you now. This was what he told me in year 1999, so he did not have guessed the Chinese invading our markets but still most of it is relevant:
When you should be SURE of what you are BUYING
- The needy/priority one first- Are you sure you need this? If yes, is it the top priority? Are you happy you are buying it?
- Postponing is loss of opportunity- You are convinced that you will lose a great deal of time, money and effort if you don’t buy.
- Aware of impact cost of buying- You have limited money, so are you sure you are not sacrificing something else for this money.
- Feasibility of merchandise- is it for a fairly long time, hope you will not behave as it was a toy. Will it last long in terms of quality and changes in preference?
- You are sure this is the best price & time- Farmers waited for cattle fare to find the best livestock- is there an opportunity to save even if you have made mind to buy it.
When you should be SURE to POSTPONE
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- Yes vs. Stress Test– The stress accompanying the buying decision is not bearable you need to postpone or revisit the decision. When you make the payment the face turns gloomy, not a good sign health wise too.
- You do not have down payment– You need to have basic funds in hand, you have wings but you need air to push through.
- You already are in debt- You have exhausted the safe limit to repay or you have bad debt payment record, it is better to sober up first.
- You are not aware of usage- No point buying a car which will be garage since you do not know how to drive it. Postpone till you learn how to use what you are buying.
- Turmoil in present status– You are about to make a career transition or someone terminally ill in family or sentiments are volatile or atmosphere is dull or itchy- postpone.
As I said, these are what a man read, experienced and gathered after a tough life. All reasons may not be scientific as they may have some spiritual indulgence. But, I see a great solution to a complex problem that we all face.
Do you face such dilemmas? What’s your mantra? Did you find the above test interesting? Do share your views in the comments section.