When you’re about to make a big purchase, it can be very exciting. From buying a new home to purchasing the latest laptop, these purchases are things that will improve your life in some way. However, it’s important to plan for these because they come with a hefty price tag and you need to make sure your finances can cover them.
If you plan for a large purchase, you’ll be able to buy those luxury items you want but without making a big dent in your monthly finances. And, when you’ve put these plans in place, you’ll be able to enjoy your purchase all the more, because you know you’re going to be able to eat for the rest of the month and pay your electricity bill!
So, the next time you come to make a big purchase here’s what you should consider:
How is It Going to Fit into Your Budget?
Firstly, you need to make sure you can afford this purchase you’re about to make, which means working out whether you’ll pay it off in one lump sum or you’ll use monthly installments. If you are going to be paying for it on a monthly basis, it’s crucial you’ve looked at what your income is and what your monthly expenses are. This will enable you to see whether you can fit this big purchase into your budget.
Hopefully, it will, but if it doesn’t, that doesn’t necessary mean you can’t buy this big ticket item. Instead, you might have to look for ways you can save money in other areas so you can meet your monthly payments. For example, you could stop dining out every week. Equally, if you can afford to pay for the item in full, be sure to check that this isn’t going to eat too much into your savings. Always make sure you’ve got enough left over for any unexpected expenses.
Are You Getting the Best Deal?
As tempting as it may be, you don’t need to plunge for the first deal you find. Sometimes, it’s worth shopping around to see if you’re getting the best value for your money. For example, if you’re searching for a new car, you’ll want to make sure you’re getting the right model for your needs and wants, and you’re making this purchase at the right time.
In some cases, you might find waiting a couple of weeks is worthwhile, as there might be a sale or seasonal markdown. So, always try to make sure you’ve researched the market to see when the best deals are available. And, don’t forget to ask the salesperson if they can get you a better deal!
What’s the Best Way for You to Pay?
When you make a large purchase you’re often given a number of different ways you can make the payment. These will differ depending on your personal preference, budget, and financial situation. For example, you may want to pay for the item in full straight away, or you may want to put it on a credit card or set up a payment plan so you can pay it off in installments. And, for a lot of big purchases, the best way to pay for them (especially if you don’t want to pay for it in full) is to opt for a low-interest plan.
How Can You Get the Most from Your Investment?
Ideally, when you’re making a large purchase, it should be something that’s going to last you a long time. Therefore, if you’re going to get the most out of your investment, you might want to consider protecting it. Insurance or service plans and warranty options will often come with expensive items, so always look into these in detail before you make your purchase, choosing the deal that’s going to help you maximize your investment. For example, even though an insurance plan might seem like an unnecessary expense, over time, it might be worth the additional money. That’s why it’s a good idea to educate yourself about what options you have before you make the purchase, because, if you’re put on the spot at the time of the sale, you might not have the chance to make the right decision.
Asking yourself these questions before you go ahead and make a big purchase could save you a lot of money and stress in the long run. Being prepared for these large financial undertakings will help to make sure you and your family aren’t walking a financial tightrope until the purchase has been paid off.
Callum McKenzie contributes to a selection of personal finance blogs to help people manage their finances better, planning purchases carefully rather than splurging on an item.