This may come as a shock to some, but if you want to build an online business, the first thing you need to learn is how to spend money – or, rather, NOT spend it – on online marketing products.

In the years that I've been helping aspiring entrepreneurs build their online businesses, I've been shocked over and over again to witness how people manage to throw good money after bad, buying books, videos, and online marketing products that they don't need.

There was the woman who spent more than 100K (the bulk of her and her husband's retirement savings) trying to market her book. She bought every online marketing product, attended every conference, paid tens of thousands for mentoring, and after years of pursuing her dream, she still had nothing to show in return. The sad truth of her story was that she spent her money on instruction that she didn't put to use and would have been better off hiring a publicist.

I've had to talk many people out of buying some of the products I recommend. For example, it simply doesn't make sense to buy a PLR content package for your non-existent website, especially when you're living in your car and can't do business using the library's Internet connection. (Yes, I really did have that conversation.)

Then there are those who spend money frivolously either through blithe disregard to, or lack of awareness for, their precarious financial situation. For example, does it make sense to spend hundreds of dollars to have your windows washed when you can do it yourself and you're already hundreds of thousands of dollars in debt and only one job loss away from financial ruin?

Likewise, if you're in that situation, wouldn't it make more sense to spend time, rather than money, learning how to install your own blog?

If you've had issues with overspending, eg. can't pay your credit card bills on a monthly basis, here are a few essential questions to ask yourself before you buy anything.

1. Can I afford this product? If it's a toss-up between paying the rent and buying the product, the answer to this question should definitely be ‘no'. However, if all your essentials are covered, and spending that money won't cause even the tiniest bit of regret later, proceed to the next question.
2. Do I really need this product? Obviously, if you want to start your own .com website, you need a domain name and hosting. On the other hand, you probably don't really need to spend 5 grand on the domain name aftermarket to get that ‘perfect' domain name. Take time to ask yourself whether you are acting on the basis of wants or real need.
3. Will I use this product?Doing market research is essential to ascertain profit potential in a specific niche and Wordtracker is a fantastic research tool. But if you're only planning to start one site in the next 6 months, you're not going to get a lot of benefit by purchasing a year-long subscription.
4. Can I buy it (or achieve the same results) cheaper or for free? To get traffic to your website, you'll have to learn how to market it online. However, buying an $800 a month subscription to learn SEO techniques may not be the most effective use of your money. Evaluate and compare a number of different marketing courses. Spend time (not money) researching free sites (like this one) for marketing tips and strategies. Put them to use and make some money. When you've made enough to pay for a course to enhance your skills, buy the one that gives you the most bang for your buck.
5. Can I wait to buy this product? While you're picking up a PLR pack for your site, you see the scrapbooking PLR pack and think that'll be perfect for the next site you have planned. Resist the urge. Unless you know for sure that you're going to start that site and can get a discount for buying in quantity, buy only what you need when you need it.
6. Will this product save me time or money? If you've mastered the art of creating successful PPC campaigns and are well on your way to becoming the next big PPC affiliate, a tool like SpeedPPC is an excellent time-saving tool. However, if you're just starting out and have never manually tweaked an Adwords campaign to produce real income; that high-end tool could cost you time, money and hair.
7. Will this product help me financially? If you're already doing business online, this question might well be answered by the PPC campaign tool example above, because time is money — and saving time and money means making money. However, if you're just starting out, you need products that help you build your knowledge, one step at a time and in an appropriate order. For example, you probably don't need The Super Affiliate Handbook if you're planning to become a virtual assistant — unless you want to be MY virtual assistant. 🙂

Ask yourself those questions whenever you plan to make a purchase (online business related or not) and I guarantee that you won't regret wasting money on products you don't need or want… ever again.