This is a guest post from Lynn, a long-time reader of personal-finance blogs. Lynn is a potential Staff Writer for Get Rich Slowly. In her first post, she explained where to find free activities and events in your area. Lynn is the CFO (Chief Financial Officer) of her family, and is working hard to increase her financial health after years of many poor financial choices.

From my toddler years on, I’ve had long hair. There were a few years when I would get it cut shoulder length, but I never ventured into short hair territory. That is, until about a month ago.

I found a cute hairstyle from the virtual salon at MarieClaire.com (you can upload your picture and try on different styles — it’s free!).  I printed my new style and ventured out to the hair salon.  I showed the hairdresser the picture and sat in the chair.  I got an uneasy feeling in my stomach as the cape was placed around my neck.

I should have listened to my gut — it was trying to tell me something.  Before I knew it I heard the scissors and she held up a long clump of my hair: “There’s no going back now.”  I managed a nervous smile.  No…there wasn’t.

The hairdresser was great.  It took about 20 minutes for the cut and then the fancy hair product came out.  She explained everything she was using so I could learn what I needed to do.  First up was the root boost to give my hair some volume.  Then my hair had to be dried with a hair dryer in a specific way to make the ends flip out.  To give the style even more “sassiness” as the hairdresser put it, she used a curling iron to curl the ends up. Sculpting wax and hairspray locked the style in.

What did I get myself into?  For the past ten years all I had to do was wash, brush and let my hair air dry.  It was perfect for my busy schedule.  I feel a bit embarrassed about the whole situation because I didn’t do one thing…

I didn’t really think through my purchase before I made it.

One of the best tips I have picked up from reading personal finance blogs is that I should ask myself whether something I want to purchase is a want or need. That single question has saved me from many frivolous purchases. The decision to get my hair cut passed the want or need test through some creative justification on my part (more about that in a bit).

With my haircut experience as my guide, I came up with a set of questions that I felt would help me really think through purchases - beyond the want or need aspect. My memory can be rusty at times so I needed something to help me remember them. It took a while to situate the questions and the wording, but finally I came up with an easy to remember acronym…WEALTH.

Here’s how it breaks down:

  • Want or need?  Even though I was looking for more questions to ask myself, this question is still important and at the top of my list. My haircut was a want, yet I ended up justifying the purchase. I convinced myself that I needed a change since I’ve had the same hairstyle for over a decade. My mind has a sneaky way of justifying things sometimes.

  • Ego?  Was I getting a haircut to boost my ego or keep up with the Joneses?  I became fixated on the picture I printed.  I thought I would look more attractive with the shorter cut.  In hindsight, I didn’t appreciate what I did have with my long hair.

  • Add-ons?  The haircut itself was one expense, but I didn’t take into account the added cost of hair product.  The product ended up costing as much as the cut - doubling the amount I originally planned to spend.

  • Lifestyle?  I thought short hair would be easier to handle than long hair.  Oops!  I should have done more research and asked the hairdresser what was needed to maintain my style even before I sat in the chair.  I’m a wash-n-go type of gal, and my new haircut is far from that.

  • Time?  Is the purchase a one time thing or will there be multiple purchases in the future for upkeep?  To maintain my haircut, the hairdresser recommended coming back to the salon every six weeks.  A $25 haircut was going to be over a $200/year expense (my previous expense was once every few years since I trimmed my own hair).  That’s not even counting the cost of replenishing hair product after it runs out.

  • Happiness?  My haircut is cute, but the happiness started to fade the first time I tried to recreate the style on my own.  My little pic used for the audition here at Get Rich Slowly was taken right after I got home from the salon - my hair never looked the same again.  It didn’t take long for frustration to set in and I found myself spending way too much time getting ready in the mornings.  I would rather do other things during that time.

The WEALTH acronym has already come in handy. A relative was selling a canoe in excellent condition that would fit our entire family. It has been a want of ours for some time, but the price was such a great deal ($150) that the want versus need question was teetering. After going through the other questions, there were add-ons to consider (canoe carrier for our vehicle, extra oars, etc.) and I wondered how much a canoe would affect our happiness. After all, we had a problem spending money in the past on things we thought we would use for family fun but rarely did.

In the end, we didn’t make the purchase and the WEALTH acronym had its first success story. Hopefully there will be many more to come - including when it is applied to my next hairstyle — I’m letting this one grow out ;)

Haircut image via shoothead.

This article is about Hints and Tips, Money Hacks  Wednesday, 12th August 2009 (by J.D. Roth)