5 Whys of spending 

We are living in an impatient era. Technology has made spending easy. We search, we tap, we swipe, we click and that’s it! Going forward fin-tech will make it easier to spend money. It seems like an ease of purchasing stuff without going to shops or malls. It saves us time, but on the other hand, it increases the speed of spending like never before.

Have you ever try to find out WHY are we really making that purchase? Let’s drill down this further with the help of 5 WHY technique and try to identify the root cause of that purchase.

To identify that, we need to first understand the concept of 5 WHY. 

5 Whys is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem.

[1] The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?” Each answer forms the basis of the next question.

The technique was formally developed by Sakichi Toyoda and was used within the Toyota Motor Corporation during the evolution of its manufacturing methodologies.

[2] Not all problems have a single root cause. If one wishes to uncover multiple root causes, the method must be repeated asking a different sequence of questions each time.

Let’s understand the concept with the help of an example. Say for example you have a car that’s not working. Simply asking “why” once will get you a step down to the root cause. The car isn’t working because the battery is dead.

Sakichi found that if you continued, you’d find a much more valuable answer.
The car battery is dead.

Why?
Well, the alternator is not functioning.

Why?
The alternator belt is broken.

But, why?
The alternator belt was well beyond its useful service life and not replaced.

Ok, now we’re getting close. Why?
The vehicle was not maintained according to the recommended service schedule.

Aha! A root cause! This is really why our car didn’t start.

It is a valuable exercise to understand out spending. Let’s take another example of my new MacBook. Why?

Because my old laptop is out of date. Why?

Because running apps on it feel slow. Why?

Because I can’t wait for the app to load and run slowly. Why?

Because I am impatient.

The new laptop has a new powerful battery, better and faster processor, better display. These are all additional features but may not affect my purchasing decision.

I bought my laptop because I wanted a fast and more responsive device. I bought a new laptop because I was impatient.

Unveiling the intent

By applying 5 WHY method we will come to know the exact reason for our spending. Knowing the exact reason will make us more aware and conscious of our spending. Are you surprised to know the exact reason for your purchase? None of these categories was what I expected before doing the 5 whys exercise. All of them reveal a little more about my intent with the purchase. When we take the time to ask ourselves why we learn a bit more about ourselves and our habits.

Why are you really pulling out your wallet today? The answer may surprise you. Do a quick Q & A session with yourself before pulling out your wallet.

40 COMMENTS

  1. This is a great article! Sometimes when we really want something we often make stupid answers to “why spend”.. And most of the time we spend because we just feel we deserve a little luxury. That’s how people get broke.

    Recently I started a money-saving challenge and came up with a plan to save $3000 in 5 months even if I don’t have money to save. The details about the plan are in this article:

  2. This is a great blog with awesome advice. I think we often overlook the “why” when spending money. I appreciate the tips. Thanks for sharing!

  3. This is a very good technique. I heard about it before already in Don Norman’s “The Design of Everyday Things”. And if a guy who cofounded Nielsen Research Group and coined the term User Experience tells you something is good, you better believe it’s good.

  4. Interesting. Is this why Arnold Schwarzenegger in Terminator 2 asked so many times why? He’s a machine trying to get down to the most detailed explanation why not to “terminate” people? 🙂

  5. Very good blog post–very true! I tend to spend money on Amazon under the guise of making life simpler or easier. Some recent purchases have been very helpful in my opinion: the cell phone mount for my vehicle, a second lightning cord to charge my iPad at the same time I am charging my iPhone, a new coupon organizer that fits into my purse so that I would always have my coupons with me. But other things haven’t really been necessary. As an example, I bought a new all-in-one printer because my old one was having issues, even though it was still working–and now I regret that because the new one is just as problematic as the old one in its own way. (I already have a return label printed for it!)

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