Whenever you make a purchase, you’re making a choice. For less expensive items, the amount of time you spend making your choice may be minimal or even non-existent. But for larger purchases with greater risks and rewards, the process can be painstaking.
Fortunately, there’s the internet.
From community to connectivity, the internet has changed our lives in many ways. The sheer vastness of information and opinions available to the average person on any number of topics would be unfathomable even 50 years ago. Among its effects, the internet has helped make us smarter, more informed consumers.
Even with this wealth of information at your fingertips, you still want to know within a reasonable level of certainty that your money is being well-spent. For that, you must ask yourself these four difficult but important questions before making a major purchasing decision.
Do I Need This?
This is perhaps the hardest question to answer truthfully. People want a lot of things – heck, I want a lot of things – but those wants aren’t necessarily needs.
You may want a brand new, fully loaded BMW, but what you need is a reliable mode of transportation. How you get to the specific make, model and year of the vehicle you purchase should, ideally, depend on your financial situation and timeline – things you need now may demand a more premium price than things you will need and therefore have time to save for and shop sales.
For more information on figuring out your needs, check out this piece on setting financial priorities.
What can I afford?
If you don’t already have a good grasp on your finances, now is a great time to take a look at your budget.
You may find that with some simple cutbacks and financing, you can afford that major purchase now. Or you may decide to use your December bonus or April tax refund as your target purchase date and choose to save up in the interim. The key is to not put an undue burden on your finances, whether that means not depleting your savings now or paying interest on credit later.
Is this a good product?
From Consumer Reports to Kelley Blue Book, there are a number of readily available and reliable resources to research your major purchase. Other good ways to gauge the quality or reliability of a product are to read product reviews or ask trusted friends and family for advice. If possible, you should also check out the product in person to make sure it lives up to your expectations and fits (imagine getting that big new 4k TV and finding you have nowhere to put it!).
Oh, and always check warranties. If you’re going to shell out a significant chunk of money, you’re going to want to make sure it’s going to last – or, at least, that you have some recourse if it doesn’t.
How much does this really cost?
To get the lowest price, you’re going to want to do some comparison shopping as well as utilize rebates, coupons, sales promotions and price-matching. But getting the lowest price is only part of the equation. There may be additional charges – like delivery, installation, and additional warranties – as well as taxes to take into account for the purchase price. Speaking of taxes, keep an eye out for sales tax holidays that the government issues to incentivize consumer spending. Although infrequent, they can save you thousands in sales tax on major purchases.
Other, perhaps less quantifiable, things to consider are your time and frustration levels. That’s why it’s important to make sure the store you’re purchasing from is reputable, makes the purchasing process as easy as possible, and has a return policy that’s flexible enough should your purchase not meet your needs.
Sure, they may take a considerable amount of money and are expected to last for an extended period of time, but major purchases don’t have to be a major headache. You want and deserve to get your money’s worth. With a little due diligence – and guidance from your team of Bank Mutual financial advisors, should you need it – making your next major purchase is within reach.