Thairath Money has compiled 5 techniques to transform impulsive shopping into smart planning, allowing you to get what you want while keeping your finances healthy.
Before swiping your credit card, ask yourself why you want to buy this. Many fall into the Diderot Effect trap—feeling the need to have matching or additional items they don't really want. For example, after buying a new iPhone, they feel compelled to get a new case and headphones too, which can cause the budget to balloon unexpectedly or result in paying off these extras throughout the next year.
Therefore, it's important to distinguish between necessities and wants. Another useful tip is:
The "48-hour rule": if after two days you still want it, then consider buying—but be sure you can afford it now and in the future (for big items like houses or cars, allow even more time).
Even with a 0% monthly installment promo, remember that this is your own money that could be invested or saved to earn returns. For instance, if your current phone still works well but you want a new one costing 50,000 baht with a 0% interest installment over 10 months, it sounds good. However, if you had deposited that lump sum in a bank or invested it, even a small return would keep your finances positive rather than negative.
This doesn't mean 0% installments are bad, but you must be sure your spending improves your life both now and in the future.
When shopping, you want the best deal. Consider these 2-3 factors before spending.
0% installment vs. paying cash: If paying cash gets you an additional discount of more than 3-5%, paying upfront might be better. But if no discount is offered, a 0% installment combined with placing your lump sum in a high-interest digital savings account (around 1.5%-1.8% per year) can earn you a profit from the interest difference.
Fixed interest vs. reducing principal interest Don't just look at monthly installments or interest rates. If you have to pay interest (such as on certain products or cash advance cards), calculate carefully. Credit card interest rates can be up to 16% per year, and personal loans up to 25% per year.
If unchecked, you might unknowingly pay high interest long term. Before shopping, you can check loan details on the Financial Consumer Protection Center's website of the Bank of Thailand or search for the best promotions on retailer or credit card brand websites.
If you want an item costing 20,000 baht with a 2,000 baht monthly installment over 10 months, you know you can pay this month, but what about the next 9 months? This is a question to consider before shopping because unexpected events can occur. So, prepare emergency savings of 3-6 times your monthly installment beforehand.
For example, after paying installments for 3 months, your income might drop or work problems arise, making it hard to pay. What made you happy could become a financial burden.
Having debt or loans isn't a life problem if you plan well and can pay them. For big items like cars or houses, you don't have to wait until you have millions saved. If the purchase is necessary and affordable, installments may be a good option.
But if you have other installment burdens—like phones or medical bills—and your monthly income is 20,000 baht, you can't allocate all your money to installments because you still need to live. The general rule is that your total debt payments should not exceed 30-40% of your monthly income. In this example, installments shouldn't exceed 6,000-8,000 baht per month.
These five points don't say you must "stop" buying non-essential items. Rather, you need to "organize" your finances well. We understand rewarding yourself gives motivation, but these rewards shouldn't disrupt your long-term life plans.
Source: Bank of Thailand, Liberator Securities Company Limited
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