At times in our lives we have to decide between making a large purchase or not. Maybe it’s putting in new carpet or replacing an appliance or buying a treadmill. No matter what the item is, here are 9 important questions to ask yourself before shelling out your hard earned cash.
How will I pay for it?
Do you have the cash already set aside or will you be putting this on credit? My advice is if it’s going on credit, you should hold off on the large purchase. Can you afford another or increased monthly payment? Try saving up for the item instead of paying for it with money you don’t have.
Do I really need it?
This one is quite simple. If it’s a large purchase and you don’t really need it, don’t buy it. The last thing you need is more clutter in your house or garage and spending your money on something that you don’t need.
Do I need it right now?
It can be a little trickier when you need to replace your hot water heater or oven. Because eventually – and sometimes sooner rather than later – you will need to replace most appliances in your home. However, if it’s not needed right now, start setting aside money monthly out of each paycheck to ease the purchasing burden. The same goes for any large purchase that’s not needed soon.
Can I wait to purchase it?
Shopping and buying something substantial can feel really exciting in the heat of the moment. But that’s also why there’s buyer’s remorse…because the next day you might regret making that large purchase. So if you’re unsure about this, try waiting 48 hours and then revisit the purchase. You may find that the excitement has worn off and you just saved yourself a lot of money and regret.
How often will I use it?
Even though I don’t use my treadmill anymore, it helped me train for a half marathon and helped me keep in shape for years. I paid for it in full so never accrued debt by purchasing it and I definitely got my money’s worth. Now I’m selling it because there’s not a spot for it in my house and it’s not being used. If the item in your case is something that will rarely be used, it’s likely going to be a wasteful purchase.
Do I have room for this large purchase?
In the case above we rearranged some things in our house so the treadmill lost its spot. If you’re thinking of buying a physically large item – even a replacement couch or appliance – it’s important to make sure there’s a spot for it and that it will fit okay. If not, think smaller to save space and cash.
Is there a more affordable and/or used option?
Determine if the item you’re looking for needs to be brand new; buying used can end up saving you a lot of money. Regardless of whether you’re looking at new or used though, be sure to compare prices from at least 2-3 places. For used items, check out safe, websites or local places such as Goodwill, Salvation Army, or other consignment-type shops. For more info, read Safety and Security Tips for Using Craigslist, which can apply to other consumer to consumer sales sites.
What is the item’s return policy?
Here’s where buyer’s remorse can come into play big time. If you didn’t wait and are second guessing your purchase a week later, are you still able to return it? Because it can vary quite a bit from place to place, check on the return policy so that you’re not stuck with something you don’t really want and/or need.
How else can or should I spend this money?
This question really could be first or last. If the large purchase costs hundreds of dollars or even a couple thousand, could you put that money to better use? Unless it’s truly a need, there are definitely better options. Savings is the first that comes to mind. If you spend that money and have little to no money in savings for an emergency, I’d encourage you to make savings your #1 priority.
Think about your other responsibilities as well. Are you currently paying on a credit card or medical bill or do you have to pay in for taxes this year?
Use your money wisely and where it’s NEEDED first and foremost.
If you’d like to take back control of your spending so you can more easily save for a goal, LSS Financial Counseling can help. Call us at 888.577.2227 for your free financial counseling session from a trusted nonprofit or click to GET STARTED ONLINE. Our counselors will create with you a realistic spending and action plan to help you achieve your financial goals.
Author Elaina Johannessen is a Program Director with LSS Financial Counseling.