The Five Why’s of Finance

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financial literacy month, finances, frugal

As I looked at yet another pair of shoes I just NEEDED wanted to purchase, I had to stop myself. I had to ask myself Why. Why did I feel the need to have these pair? Were they unusual? How will they make my life better? As I put them back, I knew that my “Whys” didn’t pan out. I couldn’t give myself a good answer to my questions. This is the process we go through in our home with any purchase, big or small, when it comes to our finances. So, here are The Five Why’s of Finance and how this process can help you create a better financial foundation for your household.

The practice is simple: anytime there is a purchase you would like to make that may affect your budget or long-term savings goals, ask yourself 5 “Why’s.” That’s it. Now, as I deem this “simple,” it really does cause your brain to not only come up with valid answers, but make those answers into something that doesn’t sound like an excuse or merely a declaration of a “want” rather than a “need.” Here’s an example:

“Wow, I really love that new car. You know what? I think it’s time to get a brand new one.”
“Well, because our current car is already a few years old and we need a new one.”
“Because it’s not as new as it used to be. And I really want that one on TV”
“Because it’s cool looking and newer than the one we have.”


We didn’t even have to go to the 4th and 5th Why before we could see that this was about a “want” rather than a “need.” As soon as the word “want” enters your mind, or is written on paper, all bets are off. If you are aggressively looking to fix your finances, wants are always secondary. Here’s the same conversation but in reference to the car situation in our home.

“I really like that car. I think it might be time for us to get a new one.”
“Because our current car almost has 200,000 miles on it and it doesn’t run very well.”
“Because we used it to it’s full potential. It has lots that needs to be fixed and we’re not going to pay the amount that we would need to fix it all.”
“Because for that amount, we could put a down payment on a new car, or pay straight cash for a new-to-us used car.”
“Because giving in a down payment on a safer car or just buying another car outright would be a better financial move for us.”
“Because it won’t give us another high bill to pay off, and won’t effect the rest of our savings. We won’t be in the red but will have a safer and better car for our family to use on a daily basis.”

See how that ended? An intelligent answer full of details and reasoning. No wants, gimmes, or whining. The purchase is a necessity. I suggest trying the Five Why’s of Finance out for yourself, and actually writing down your financial Why’s. By putting items on paper, rather than in your mindset, you can visually see where you may need more discipline, or where you could actually have “permission” to buy an item. The mind will trick you but the pen never lies.

About Amiyrah

My name is Amiyrah and I'm an an African American fashion & lifestyle blogger based in Ohio.

Plan Your Year Now!


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  1. 4.10.13

    Love this!! Great why’s you got there! I know for us we make sure to live in our means, and not over spend and such!

  2. 4.10.13

    My eyes are bigger then my wallet, this sounds like something I need.

  3. 4.10.13

    Very smart strategy!

  4. 4.10.13
    Jen@BigBinder said:

    This reminds me of a philosophy class I had in college – just keep asking why to the whys and you’ll sort it out! I never thought to apply it to finances, though – great suggestion!

  5. 4.11.13

    I never heard of this idea applied to finances before. Great idea!!!!!

  6. 4.12.13
    Hali said:

    Great points!!

  7. 4.15.13

    I’m going to try this out! Well, at least on major decision. It is a very thoughtful & reflective exercise, which would prevent people from making decisions in haste. I’ll let you know how that goes!