Often when we regret a purchase, it’s because we realize on some level that we didn’t do a good job of weighing the costs of an item against its benefits. And of course, the risk of regret is higher for bigger purchases, like homes, cars, expensive electronics, even a college education. To minimize this risk—no matter the dollar amount of your next purchase—do this mental exercise first:
- Think of all the benefits of the purchase, i.e. how it will help you, how you will enjoy it, how long you will use/enjoy it, if it will make your life easier, etc. In your mind, put all of these benefits on one side of a scale.
- Now think of all the costs of the purchase, not just its price tag. Think about associated costs, like gas and insurance for a car, any maintenance costs, the cost of your time if you’re purchasing something that requires a time investment, etc. Put these costs on the other side of the scale in your mind.
- Which side weighs more? Are there more and bigger costs than benefits? Whichever side “weighs” more wins. If it’s the benefits side, it will most likely be a smart purchase. If it’s the costs side, it may not be a wise purchase.
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