Barbara Corcoran gradually built up her real estate empire The Corcoran Group before selling it for an astounding $66 million in 2001. For the most part, the self-made millionaire and “Shark Tank” star doesn’t have to worry about price tags. But she’s still a conscientious shopper.
Before buying anything, she asks herself one question, she tells journalist Farnoosh Torabi on her podcast “So Money”: How often will I use it?
“If I get great use out of something, I will spend anything,” says Corcoran. She gives the example of a jacket she recently splurged on: It was so expensive that “I had the salesclerk take the tag off, take my credit card and not tell me [the price] because I knew it was a pricey label.” But it’s a purchase she can justify, she says, because “I'm going to wear the heck out of it.”
On the flip side, “If I don't get good use out of it, I'm not going to spend a dime. Forget about it."
Corcoran knows what it feels like to buy something she won’t get much use out of. Her most regrettable purchase was a $3,000 Gucci dress that she only wore twice and “I'm still feeling guilty about it,” she tells CNBC Make It. "What a waste of money.”
Anyone can follow Corcoran’s spending rule, no matter your income. Asking yourself how often you’ll use something before buying it will help you think through your purchases more. Chances are, you’ll become a more conscious spender, buying more of what you need and less of what you want in the moment.
It’s the same strategy one financial blogger, who goes by the pen name “The Money Wizard,” used to bank $150,000 by age 26. "Question the things you're spending your money on," he says. “Question whether or not they're going to actually bring you happiness.”
And, “What makes you happy is not decided by your friends, your neighbors, or the commercials on TV," he adds. “Just because your friends enjoy spending lavishly on clothes, doesn't mean that's for you. … Don't waste money on things that aren't important to you."
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
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