Things to Know Before Making Big Purchases
Contributed by Money Key
25 February, 2020
At times in your life, you will be compelled to purchase what are often referred to as "big ticket items". Big ticket items would usually include things like cars, major household appliances, furniture, major vacation plans and expensive jewelry. Some people might even put the purchase of a home in this category. Unlike when you go out to make minor purchases, the purchasing of big-ticket items should involve a bit of forethought and planning.
The last thing you want to do is get yourself in financial trouble by purchasing things you cannot afford. It would kind of take the fun and excitement out of buying the item you bought. For that reason, you should read the sections below for a better understanding of things you should know and do before making major purchases. Remember, your objective should be to get what you want/need without putting your personal finances in jeopardy.
Planning and Budgeting
As indicated above, you don't want to be impulsive about spending your hard-earned on things you cannot really afford. If you want to keep yourself from making a financial mistake, you should make strategic plans about when it's the best time to use your financial resources to purchases major items.
If you aren't in the habit of preparing a personal budget, you probably aren't aware of just how valuable such a budget can be. At the least, you should sit down and prepare a working budget prior to making major purchases. By laying out all your income and expenses in black and white, you'll get a clearer picture of how much discretionary money you have available and how much you can realistically allocate to a major purchase.
Shopping for the Best Prices
If you are like billions of other people in the world, your access to discretionary money is very limited. If that's the case, doesn't it make sense you would want to take great care with how you spend that money?
If you are planning on making a major purchase, you can afford to spend a few more days to make sure you get the most bang for your bucks. The best way to ensure you get the best prices available is to forget about your loyalties to a particular merchant or brand. You need to compare prices and quality among several merchants. If possible, you should make them bid for your business. You also want to see if any discounts or coupons are available on any of the items you have under consideration.
Financing Your Purchases
Admittedly, there will be times when you don't have a choice, and the need for something will be sudden and unavoidable - such as unexpected medical expenses. If the imperative need is there and liquidity is an issue, you may want to consider short-term financing options. Before you do, you need to make sure you can handle any additional debt load. You may want to consider borrowing options like credit cards, merchant financing, or online short term loans to help mitigate the unexpected financial strain, if you do not have the savings to cover it. Of course, these are the types of loans that you want to make sure you can repay on time to avoid issues.
It's exciting to contemplate purchasing big ticket items. If you take a responsible approach to the purchasing process, you should have no problem getting what you want/need at a price you can truly afford to pay.
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