Barbara Corcoran: This Is One Question You Need To Ask Before Buying Anything
Written by
J. Arky
Edited by
Amber Barkley
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When it comes to finding and applying expert money advice to your personal finances, the line between spending money and saving money can get a little thin. No matter if you live in New York City or a small country town, the cost of living has gone up, so being more cautious about what you add to your cart is a good way to stay mindful and frugal.
If you are looking to edit your spending habits and want some shopping advice, put on your headphones and download an episode of “So Money,” hosted by Farnoosh Torabi, an award-winning financial correspondent, best-selling author, and television personality. Torabi’s podcast, in its own description, “brings candid conversations about money with the world’s top business minds, authors, and influencers.”
In one episode, Torabi spoke with guest Barbara Corcoran, one of the stars of TV’s “Shark Tank” and who offered financial advice based on her rags-to-riches story involving the leap from working-class beginnings to an estimated net worth of $100 million. Here’s a closer look at what advice she had to share.
Quick Take: Deciding What To Buy
During their conversation, Torabi asked Corcoran what makes her buy one thing over another, especially when price isn’t an issue.
“Okay, so you’re part of a community of spenders, Barbara, that arguably doesn’t need to worry about price tags,” Torabi said halfway through the episode.
“I mean, you are a bit price-conscious, which I like. I like to hear that. When you do make a purchasing decision, if price is not really the issue, what makes you want to buy something if you’re comparing two things — a product, or a service — what makes you go for something versus not?”
Ask Yourself How Often You’ll Use It
Corcoran has found many ways to save and live frugally over the years — she will fly first class if she’s not the one buying the ticket, but if it’s coming out of her end, then sitting in coach is fine by her.
“The first thing I ask, and probably the main thing that I ask, is ‘how often will I use it?'” Corcoran told Torabi. “I’m just not wasteful. I don’t mind spending a lot of money on a jacket that I’m going to wear on every flight, every rainy day.”
Recalling a recent purchase, Corcoran said, “I had the salesclerk take the tag off, take my credit card and not tell me. Cover up [as] I sign it. Because I knew it was a pricey label. Why I went ahead with that purchase [is] I wear that beautiful jacket, [it] would look good on every air flight I take. I wore that yesterday in the rain. I had it on this morning. I’m going to wear the heck out of it.”
That’s quite a statement from Corcoran, who built her $5 billion business with a $1,000 loan and sold her real estate empire, Corcoran Real Estate, for $66 million a few years ago. Most people in that position might be burning money on things they do not need or care about. Not Corcoran.
Don’t Buy What You Won’t Use
“If I get great use out of something, I will spend anything,” explained Corcoran. “If I don’t get good use out of it, I’m not going to spend a dime. Forget about it. It’s so wasteful. I can’t help but to think what a family could do with that money who didn’t have the means. It would feed their family for a month on the cost of a designer jacket.
“I just don’t have that freedom of thought to be able to go there. Unless I’m going to wear it and justify it, ‘Oh, no. It’s alright. It’s okay to do this.’ Then I’m okay with spending money.”
Tobari asked Corcoran to recount the purchase of a Gucci dress that was to be used sparingly when she filmed “Shark Tank.” Corcoran ultimately didn’t feel the dress was for her, solidifying her motto of asking herself if she’ll use the item before making a purchase.
“I’m not going to blame it on a guy that helps me dress with TV,” Corcoran said. “He said I’d wear them on ‘Shark Tank’ and I’d look a million bucks. Totally goes, I never wore them on ‘Shark Tank.’ I feel so guilty. I only wore it twice a month. I’m not wearing more.
“As we speak, that dress is in the box that I had labeled my classical sisters. I have five sisters, all of which, except for one, is exactly my size. Anything I don’t use, it goes out that season to my sister’s knit room.”
Corcoran went on to explain that she’d rather give away her clothes to her sisters and see them happy than purchase new things for herself that do not make her feel the same way.
Final Take To GO
Asking, “How often will I use this?” with every purchase will not only help you get rid of impulse purchases, but it will also align your intentional transactions with your monthly budget. The next time you’re faced with buying anything, particularly if it’s out of your normal price range, remember Corcoran’s advice and consider whether you’ll use it enough to justify the cost.
Caitlyn Moorhead contributed to the reporting for this article.
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