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How can one become a wise consumer?

The first challenge with every decision is to answer the question:  “Is this something I need or is this something that I want?”   Until one knows they have the resources to cover all of their needs, spending on the “wants” should be delayed.  When confronted with a major purchase decision, being a good consumer typically involves these steps: 

(1) Don’t buy on impulse. To reduce the likelihood of buying on impulse, some consumers intentionally carry very little cash. Or you can ask yourself a set of questions: “is this really worth the money?” “Will it last?” How much trouble will it be to take care of?” or “How many hours of my summer work is required to own this?”

(2) Do your homework, research the product and perhaps the industry.  Identify your choices of both product and vendor.  What are competitors offering?  Investigate by asking them or researching the product on the internet. What are others saying about the product?  Can you find the same product for less, somewhere else?  Recommendations from friends may be welcomed and merit consideration over an advertisement.  Always keep in mind that doing business with a reputable person and/or business can prevent problems later. Perhaps most importantly, your investigation has slowed you down and prevented an impulse purchase that you regret at a later date. Sometimes the passage of a little time can help one see most clearly whether the purchase is for a “need” or a “want” and that the desire to own the product wanes.

(3) Once you have made your purchase, be sure to check your receipts and invoices in detail.  Be sure you are only being charged the agreed upon price and that there are no hidden costs or service charges.  Some services that can occasionally have hidden fees or charges include utilities, TV, internet, phone, bank accounts, and credit cards.

(4) Always guard your personal or account information.  When asked for personal information, always consider or inquire “why do you need it?”  In some instances it may be appropriate, in other instances this may not be the case.

These traits are displayed by wise consumers and of course applicable to people other than college students.

Jeff Romine, Ph.D., CPA, Investment Advisor Representative

Financial Planners of Missouri

110 S. Franklin

Kirksville, Mo. 63501

(660) 956-9416