Updated on 04.08.10

Why Do You Buy?

Trent Hamm

What’s the single most important piece of personal finance advice you would give a person?

I’ve heard this question (or variations on it) many times. I have a very simple answer to it.

Whenever you buy anything, ask yourself why five times.

That seems really off the wall at first glance, but I firmly believe that no single piece of advice can match it in terms of getting your money under control.

I’ll show you what I mean through the lens of three purchases I considered recently.

I have about $1,000 saved up for a big personal purchase. I had been considering buying an iPad with it, even before the Apple announcement in January. I held one in my hands a couple days ago and considered it.
Why do you want an iPad? It’s an impressive gadget to hold in your hands. I can see myself using it and enjoying it.
Why would you use it? I can surf the web on it and read books on it and periodicals, too.
Why not just use your laptop? This is more portable.
Why not just use your iPod Touch?
Why not just read a paperback?

And, boom, my argument for buying an iPad goes down the chute. Sure, I can afford it, but why? It doesn’t fulfill a need in my life that isn’t already fulfilled by something else, or at least not in a compelling enough way to pay hundreds for it. Yes, I’ll probably buy a tablet computer someday, but not yet. It doesn’t actually fiil any sort of need.

I allow myself $30 a month to spend on books. I was in the bookstore recently, considering whether to pick up a copy of a novel I’ve been looking forward to for a long while.
Why do you want this novel instead of the books you already have? It offers a compelling story, but I do already have a few to read.
Why not just wait until it’s on sale or in paperback? I want to read it now!
Why not just ask for it on PaperBackSwap? It’ll take some time to get it there because it’s such a new release.
Why not just request it at the library? I could do that… it might take a few weeks.
Why not see if one of your friends has picked it up and swap with them when they finish? Even if the library doesn’t have it, one of them might.

And, boom, I’ve got several avenues for reading the book without spending the money. This keeps me from buying a lot of books because my actual need (to read) is fulfilled in other ways for much less cost.

Another example: I’m considering buying a one pound small wheel of Maytag blue cheese at the store.
Why are you buying this cheese? I want to make some good blue cheese burgers and I want some to sprinkle on my salad.
Why are you buying a pound for that? It’s cheaper per ounce.
Why would you let the eight or so ounces you won’t use go to waste? I, uh, wont?
Why not get feta for your salad because it’s cheaper and tastes more appropriate? Hmm… that seems reasonable.
Why not just get a four ounce piece of the blue cheese?

And there you have it. Instead of buying the one pound chunk, I bought a four ounce chunk and some feta.

In each example, I came up with a result that either made me realize I didn’t really need the item at all or pushed me to another purchase that met my needs for a much lower cost.

The five whys push me there every time. The simple process of thinking through a purchase almost always leads me to a better solution that my first impulse points me to. This saves me money and prevents me from making impulsive, wasteful buys. Instead, I find I have plenty of money left for the things that really do matter in my life.

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  1. Shannon says:

    “It doesn’t actually fiil any sort of need.” Better correct the typo…

  2. Julie says:

    Interesting article. Is there ever a time you ask yourself “why times five” and wind up going with the original purchase?


  3. anna says:

    My library has e-books or e-audiobooks that you can download to your computer than put on your iphone, ipod, ipad, mp3 player, kindle etc. etc. There is no wait for these books because you don’t have to wait for someone else to return it and they do have lots of popular/new books avaliable.

  4. Nicole says:

    But all the cool kids have one…

  5. Ryan says:

    anna, that’s interesting. Is there some sort of DRM that makes the file useless after a few weeks? Otherwise, isn’t the library just giving away books?

  6. jgonzales says:

    Ryan, yes, they do, usually 2 to 3 weeks (depending on the length your library regularly loans books). There are a few books giving classic books away in audio format. Overdrive is the company that works with my local library.

  7. Derek says:

    Regarding the library ebooks: in my experience, the digital book is DRMed so that it’s active with only one user. Then it expires and the next person gets it.

  8. anna says:

    @Ryan I’ve never actually used the program, I prefer hardback books and cds to files but I just looked it up and you can ‘check out’ 12 audio files at a time and must return the file before you can check out another one. I’m imagining a iTunes sort of set-up where you have to sync your phone/kindle etc. to your computer and drag the file back to the library to trade for another one? I just know it was something I definatly didn’t imagine a library having and was impressed that mine does. I’m sure if the library made this knowledge well known a lot more kids (I live in a college town) would be using the library.

  9. anna says:


    overdrive is who my library uses also so i’m sure it is the same system.

  10. Gena says:

    Thanks for this. It’s a message I REALLY needed to see today.

  11. kristine says:

    good post

  12. Joan says:

    This is a good technique for finding out the cause of a problem, too. We use it at work to track down errors. If something is wrong, you do the “five whys.” You end up with a lot of useful information – for instance, systems that put too much responsibility on one person instead of a team – and you get rid of the whole “whose fault is it” thing and get to “how can we prevent it” instead.

  13. This is also a practice in ‘Lean’ thinking for problem solving and getting to the root of a problem. It’s called the ‘5 why’s’ and I don’t just use it at work but at home.
    I love your use of it!

  14. Great article, though I wonder if I used this “why” strategy if I’d ever buy anything. Which… maybe isn’t that bad(!) but on the other hand it seems like I should be able to buy some things that don’t meet the “5 why” requirements for the pleasure of buying. There is nothing I really “need” with the exception of a roof over my head (I could live in my car instead of in an apartment and shower at the gym… do I really need an apartment?), a laptop for my job, and some clothes that look decent for work. Oh, and food, but it doesn’t need to be fancy food. Other than that… well, I don’t need anything. I could talk myself out of every single purchase I make this way. I think it’s important to go through the 5 why’s exercise and sometimes let yourself ignore the results. :)

  15. Jules says:

    I’d think that if you could bear to stand there and think about buying something, you don’t *really* need it.

    While it’s great to ask yourself whether or not you need something that you want, I’ve always figured that if it’s planned for, you may as well buy it. I usually plan on buying one book a month (and before anybody jumps on me for not using the library: I live in a non-English speaking country; English books in the library are mostly thrillers or stuff I don’t really like reading), and for the most part, I stick with it.

  16. Great stuff, except for I wouldn’t go thru this anytime I wanted to buy “anything”.

    For minor purchases, sometimes you’ve got to just let go.

    If not, the whole thing of living frugally and saving can just be too draining.

  17. Ken says:

    I think this can help when looking to buy something larger (appliance, tv,computer). If the one you already have works well, you don’t HAVE TO upgrade….you just want to follow the Joneses…we know where that will take us.

  18. Debbie M says:

    I think that the word “need” could be replaced by “want.” In these examples, he finds better ways to fulfill his want.

    Then it’s easier to see that one could get through the five questions and still buy something. (I thought it was going to happen with the cheese, but it turned out he liked feta more for his salads.) After five questions, it’s certainly possible that you could see that you have a want that is not currently being fulfilled and for which you cannot think of a better way to fulfill it than what you are now considering.

    And even in one of the cases above, he still is buying something (some bleu cheese, some feta).

  19. Claudia says:

    One of the things I do is divide the cost of the item by my hourly wage. I then ask myself do I really want to work 3 hours to buy this shirt or 8 hours to buy these shoes,etc. Or in the case of the Ipad, that’s almost 3 weeks of net pay. Although, in the case of the Ipad, I’m not interested anyway. I read blogs, news, etc on the computer, no way do I want to read books other than “real” books. I can’t see curling up with a Kindle or an Ipad.

  20. Steve says:

    I think this article would be improved with an example of an item passing the “whys.”

    Also, for those rare ones of us who want to follow the opposite of financial advice (e.g. I want to encourage myself to trade my relatively plentiful money for time, happiness, etc) how can I flip this one around? The “Five Hows”? “How will this improve my life?…”

  21. Evita says:

    A little obsessive maybe?
    Honestly, I cannot see myself spending that amount of time introspecting each time I open my wallet…..
    but if it works for you, GREAT!

  22. haverwench says:

    For those who have asked, here’s an example of a case in which the five whys lead to the conclusion that yes, I actually should make this purchase:

    1. Why do you want to build a media PC? – So that we can watch shows on Hulu and other sites, as well as downloaded videos, on our TV.
    2. Why can’t you use your old laptop for that? – Because it’s incredibly slow and cranky and it keeps crashing in the middle of a show.
    3. Why can’t you use your desktop machine? – Because it’s too big and noisy and power-hungry, and it throws off too much heat.
    4. Why can’t you use your MacBook? – Because that’s a work computer, and it can’t spend its life hooked up to our TV set.
    5. Why don’t you just watch that stuff on your computer instead? – Because the video quality is poor, and there isn’t a comfortable place to sit while doing it.
    6. Well, gee, then, I guess you actually should build a new media PC.

    Asking the five whys was still useful, because it showed that we weren’t buying frivolously, and we could go ahead and spend a few hundred bucks on the components without guilt.

  23. Judy G.. says:

    I don’t quibble with the idea of five Whys. I just wish the author hadn’t used buying books as an example. Publishers today have enough problems in this digital age without your encouraging them NOT to buy books! (I am not a publisher) Since you’ve set aside the money anyway (a good thing), buy the book and then give it to the local library for their booksale so it can then raise money for the library.

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