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Ways to Think About Money Before You Buy Anything

How much does a cup of coffee cost? If you go to your local coffee shop, you might see that a twelve-ounce cup of coffee is priced at $3 including tax, so your answer would probably be $3. Seems simple enough, so why am I asking this question?

It’s so easy to spend money nowadays that few people take the time to consider the true cost of each transaction. Swipe your credit card, tap your phone, or press a button and you are on your way. But what are you actually getting in exchange for your money? Is it worth it? By spending money on X, will that leave less money for Y? If so, is X or Y more important? In other words, how much do things actually cost?

If you want to make smarter decisions about money, you need to be mindful about spending it, and part of being mindful is considering the true cost of everything you buy—or don’t buy—and using that to determine whether it’s worth it or not.

To do this, you need to start asking yourself questions other than “How much money does this cost?” In fact, there are eleven key questions you can ask yourself before making any spending decision that will help you figure this out. This is the first crucial one to consider.


When most people want to buy something, they look at the dollar price first and then ask themselves if they want to buy it. The cheaper it is, the easier the decision often is. “This cup of coffee costs three dollars. Do I want to spend three bucks on this cup of coffee?” People in the United States consume 400 million cups of coffee every day—it’s a relatively cheap and easy thing to buy without being mindful of it.

But the next time you want to buy something, start by asking yourself a more personal question: “How much value will this bring to my life? How happy will it make me today? How happy will it make me tomorrow and next month?” Only you know what truly makes you happy and if it’s worth spending money on.

Answering this question for a cup of coffee is pretty easy. If you love good coffee and having a high-quality cup first thing in the morning sets the right tone for your day, then you’ll probably determine that it’s worth it to spend $25 on a bag of beans or $3 on a small cup at your local café.

So many personal finance books and money experts recommend cutting back on your daily coffee or daily wine or whatever relatively small indulgences you tend to buy during the week. The idea is that these small purchases add up (a $3 cup of coffee every day is $1,095 a year) and that this money would be put to better use if saved or invested for later. But those small things often make you happy and bring joy to your life and are therefore much more valuable than they appear. Your best friend may not want to spend $25 on a weekly manicure, but if doing so makes you feel good and confident, and you use the time at the nail salon to chill out after a long day at the office, then by all means, go for it. Don’t give up what you enjoy just to save a few bucks. Trust me, when it comes to the bigger picture that small moment of happiness is likely more valuable than the extra money you are saving.

On the other hand, if you’re bored at the airport and start to get a little thirsty, you can use this question to determine how much you really want that organic cold-pressed green juice; you may decide that a free cup of water will do the trick just fine. By the time you find out the green juice costs $14 a bottle, you’ve already made up your mind not to buy it.

But “Will this make me happy?” might be more challenging for larger purchases like a nice new suit, a car, or even a house. People often spend the most money on big houses, expensive cars, or fancy trips because they feel like it’s what they’re supposed to do, not because they really want them or the items will truly make them happy.

If you love to drive and have a passion for cool cars, then perhaps spending extra money on a high-performance convertible might be worth it. Then again, perhaps you’ll determine that you’d be happier spending less on a car and using the money you saved on an annual trip to Europe. In the end, you may end up spending the same amount of money, but one decision will likely bring you much more joy than the other. If you’re unsure, sleep on it or make a personal rule that you won’t buy something whenever you are unsure of its value. Buy what you want, what gives you joy, and say no to anything that is “meh” or “maybe” or “I don’t know.”

So the next time you are walking by the coffee shop or the salon or the wine bar or searching for properties online, ask yourself, “How happy will this make me, and is it worth the money?” Or just wait a few days, weeks, or even months and ask yourself the same question to see if you still want to buy it. A popular strategy is to always wait thirty days before any purchase over a set dollar amount—say, $100, or, only checking out from your online shopping cart once a month. Over time this level of mindfulness will help you more easily identify the things worth spending money on and maximize your enjoyment per dollar.

Questions like this become easier to answer as you practice them, and over time, I guarantee you will start making better financial decisions. This psychological stuff is powerful! Remember it all comes back to trade-offs—if that cup of $3 coffee makes you happy, then by all means, drink up. But as you apply these questions to annual recurring expenses or bigger purchases, you’ll be able to better master your money.

Adapted from Financial Freedom by Grant Sabatier, copyright (c) 2019. Published by Avery, a division of Penguin Random House, Inc.

This excerpt was featured in the April 14th edition of The Sunday Paper, Maria Shriver’s free weekly newsletter for people with passion and purpose. To get inspiring and informative content like this piece delivered straight to your inbox each Sunday morning, click here to subscribe.