You will write a checklist to use before any large purchase or financial product.
Every lesson in this module ended with the same idea in a different form: slow down, set your own number, separate the decision from the pressure around it. On a calm afternoon that's easy to agree with. In a showroom, at a dinner with a friend who sells insurance, or at 11pm with a countdown timer on the screen, it vanishes. A checklist written now, by the calm version of you, is how the idea survives those moments. This exercise builds one and tests it on a real purchase.
Choose the amount above which the checklist applies. Below it, you buy as you normally would. Above it, nothing gets bought until the checklist is done.
The right threshold depends on your income and how often you make purchases of that size. Too low and you'll stop using the checklist because it's tiresome. Too high and it never applies. A useful starting point is an amount that would sting if you regretted it, often somewhere around a week's take-home pay, though you should pick your own. Add one more rule regardless of amount: every financial product, whether a policy, an investment, a loan or an instalment plan, goes through the checklist.
Decide how long you'll wait between first wanting something and committing to it. Many people use two tiers: a short wait, such as 48 hours, for purchases just above the threshold, and a longer one, such as a week, for larger purchases and every financial product.
The wait does two jobs. It lets strong feelings fade, which lesson 1.2 showed are behind many fast money decisions. And it defuses deadlines, because a deal that disappears in 48 hours was usually designed to stop you thinking. If a deal really is gone after your waiting period, you've lost a discount on something you weren't sure you wanted.
Insurance policies in Singapore come with a free-look period during which you can cancel, and some other contracts have cancellation terms. Check the terms on your documents. Your own waiting period comes before you sign anything, which is a better time to think than after.
The questions must be answered in writing, because writing forces numbers onto the page. Draw them from this course. A good set covers:
the total cost, every instalment and fee included, and whether you'd pay it with no offer attached (lesson 4.3) your own maximum, set before you saw the seller's price, and where it came from (lesson 7.1) whether you'd buy this from a stranger giving you the same information (lesson 7.2) which part of your budget pays for it, and which goal it delays or which saving it replaces what state you're in right now, and whether you'd make this decision on an ordinary Tuesday (lesson 1.2)
Keep it to five or six questions. A checklist of fifteen won't get used.
Choose one person you'll talk to before committing above the threshold. They don't need to be a money expert. What matters is that they weren't in the showroom, haven't seen the ads and will ask you to explain your reasons out loud. A partner, sibling or calm friend works well. Tell them they're on your checklist, so the call doesn't come as a surprise.
Darren set his threshold at S$300, with a 48-hour wait for purchases from S$300 to S$2,000 and a seven-day wait above S$2,000 or for any financial product. His person is his sister. His five questions are the ones above, in his own words.
He tested it straight away on a S$2,400 gaming laptop he'd been looking at, offered at "S$200 a month for 12 months, 0% interest". The total was S$2,400, the same as paying upfront, and he'd buy it without the offer. His own maximum, written before he looked at prices again, was S$1,800. The money would have to come from his untouchable account, whose new rule from lesson 3.3 lets it clear expensive debt and says nothing about laptops. And he'd first looked at it at midnight after a bad day at work.
That made it a seven-day wait. On day four he called his sister, who asked what was wrong with his current laptop. The honest answer was a weak battery. A replacement battery cost S$150, and he bought that instead. He kept the laptop page bookmarked in case he still wanted it in three months, with S$1,800 written next to it.
Write your own checklist with a threshold, a waiting period, your questions and your person, and try it on something you're considering buying now.
Write the checklist and test it on one purchase you are considering now.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).