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What To Ask Before Making a Major Purchase
Have you ever made a major purchase then kicked yourself a few weeks or months later for making such a stupid mistake? I bet you have, I know I have more than once.
You know how it goes, you need a new appliance, car or whatever it might be. You go out shopping and get so excited by all the bells and whistles.
Then, a few months down the road you are regretting your decision because it is causing you financial hardship or you just didn’t need or even use any of those bells and whistles you were so excited about in the first place and you are paying for them anyways.
After a few of these stupid mistakes, I promised myself that it would never happen again. Making a spur of the moment major purchase just isn’t worth the price you will be paying, sometimes for years down the road.
Now, when I make a major purchase, I take a step back and ask myself some questions to help me make the best decision for my family and finances. Here is what I ask myself and so should you before making a large purchase.
Questions to ask yourself before making a large purchase
Do I really need it?
The first question you need to ask yourself is if you really need this item. This might seem like a no brainer, if you are shopping for this item, of course you need it, right? The truth is sometimes you do, but more often than not, you don’t “need” it, you “want” it.
Let’s say you are shopping for a new TV. Your old one still works but it’s an older version. You want a huge flat screen like everyone else has. This is a want, not a need.
Can I afford it?
You also need to ask yourself if you can afford it? Do you have the money in your savings account right now to make this purchase or are you going to have to use credit to buy it? If you are going to need to put it on credit, then the simple answer is you can’t afford it.
Although I know that it isn’t always this simple, sometimes you just have no choice. But I will also say that there are plenty of times where it is this simple. Ask yourself if this item is worth getting in debt for. If you think of it in these terms, you will avoid making costly mistakes in you purchases.
Do I need all the extras?
When shopping for a major purchase, you sometimes get wrapped up in all the bells and whistles that the more expensive version has to offer. This is one of the ways I have made poor decisions in making major purchases in the past.
The salesman rolls around, and of course shows you the latest and greatest with all the coolest features you can think of. You get so excited; these are features you would love, but are they necessary? The answer is usually no, unless it is a feature that might cost you a bit more up front but will ultimately save you money throughout the life of the product.
How long will it take to pay off?
If you do need to use credit for a major purchase, you should consider if you can afford the monthly payments. I get it, sometimes you just have no choice, your car breaks down and it’ll cost you more to fix then it is worth or you just know that it is in such bad shape that any money you put into it is just going to waste.
The first thing I would ask myself is “Do I have other options”? Can I take public transportation or carpool with coworkers while saving up? I know that these would not be options for me, mainly because of where I live so I get it. But a lot of the time it is an option.
Before jumping feet first into your purchase, take a good hard look at how much more it’ll cost you by using credit in terms of interest, how long you will be making payments and how you are going to work the payment into your budget.
What else is it going to cost me?
You also need to think about any extra cost you might have to pay for that item. Take for instance you want to purchase the latest and greatest TV that has streaming services such as Roku, Netflix or Hulu built right into the TV. Sounds great, right? No need to buy special equipment to be able to watch anything you could possibly want to on your new TV.
Well, when you consider that you need to subscribe to all these services to be able to do so, the costs can add up. And it is not just a one-time cost, these will be recurring monthly costs that you will need to pay for.
Is there other purchases that are more of a priority?
A lot of the time, “wants” are more of a priority to people than “needs” that might be coming right up around the corner. Even if the “want” item is something you can afford now, are you going to be able to afford that “need” item that is ready to kick the bucket?
You should think ahead when spending a large amount of money. Is your washing machine on its last legs? Are you going to be able to afford that washing machine in a few months if you spend all your money on that awesome new item you are about to purchase but don’t need?
Do I need it now or can waiting a while save me money?
If the item is a “want” then most likely you do not need it now. Do some research and check out how much this item may cost you if you wait a while. I didn’t know this until we purchased our last TV, but electronics and appliances any many other items have selling cycles. There are certain times of years that the “newest” items are released so the older models go on sale or clearance.
Take for instance again, that TV we purchased. We were shopping for it sometimes after Christmas, we were told by the salesperson that the one we were looking at was just reduced due to the fact that a shipment of the newer models were on their way. He explained that the newest models are released not long before the most watched TV event of the year, which happens to be the super bowl.
Also, the one we had are eye on was out of stock except for the display model which gave us a bunch of wiggle room to negotiate the price down. We ended up getting that TV for less than half the price it had been going for a month earlier! Sometimes just waiting a month or so could shave off 25 %, 50% or even more of the cost.
What’s the return policy and warranty like?
One more thing you need to look at before making a major purchase is what kind of return policy and warranty comes with that item. It could really cost you a lot of money without a decent return policy. What if you bring your item home and a month or so later things start to go wrong? You could be out of all the money you spent on that item.
A good warranty is also a must. It may be one year down the road and problems arise. With a good warranty, you will be protected and your item should be fixed free of charge.
Every time you make a major purchase you need to ask yourself all these questions. Take a step back and a few days to consider the impact of your purchase. Trust me, it’ll save you a bunch of money and a whole lot of heartache down the road.
Do you have a story of a mistake purchase you have made and learned from? We would love to hear how you have learned and how we can too, please share with the rest of us.
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