How you spend your money can have a huge impact on not only your financial health, but also your overall well being. But hey, we all have needs, which can range from basic necessities to investments in household appliances, a car, a new piece of furniture, and so forth. Whatever may feel like a “big” purchase to you, it is important to consider several things before making the final decision. But why so?… one would wonder. Well, it is not uncommon to spend a huge chunk of money on something that ends up disappointing you completely or leaves you broke if not get you into a pit of unmanageable debt. And let’s be honest, no one adores the feeling of going broke. To avoid the frustration that comes with being penniless,
Here are some tips on how to avoid going broke when making big purchase decisions.
Shop Around
There’s always a high likelihood that the product or service you want to purchase is available at other stores at a better price. If you need to buy a car, for instance, it’s a good idea to check out several dealerships to see how much the brand and model you’re looking for is priced at. If you’re a bit short on cash and you still feel you need to buy a car, you’ll also want to compare financing deals and plans at several dealerships. Since car financing mostly requires you to make several monthly installments for a specific time duration, shopping around will enable you to pick a plan that won’t put too much strain on your finances and you’ll be comfortable fulfilling your end of the bargain. Comparing prices or costs from various sources can help protect you from going broke, and this applies to other big purchases as well.
What’s The Purpose of the Purchase?
One of the most common reasons people go broke after making big purchases is the lack of a goal. The fact that it’s a big purchase should not only revolve around the aspect of price. Rather, it should reflect on how important the item you are purchasing is. Maybe you need a new refrigerator because your family has grown from the time you bought your current one, and most of the family members consume lots of frozen meals. Perhaps your AC unit is broken down and it’s almost summer, so you need to replace the entire unit because the current one is not fixable. Purchasing decisions made with a goal in mind are less likely to wipe your wallet clean because you are most likely to have planned them for a while.
Do You Really Need It Now?
We all desire to drive the best cars, live in the best mansions, go to the best luxury hotels, and the list goes on and on. Unfortunately, however, not everyone manages to get all they desire in life. There are things you can afford for sure but you’re okay without, and then there are those that you really need like yesterday. There are also safer ways to buy things you cannot afford, but why drain your savings account dry to purchase something that you don’t exactly need or something that can wait? Before making that big purchase decision, it’s important to consider if you really need it now or you just want it. If you go buying stuff because you simply want them, it may not be too long before you start selling them out at throw-away prices.
Consider Renting (or borrowing)
Let’s say you’re hosting an event this weekend in which you’re expecting at least 100 guests. Everything else is planned and catered for, but you don’t have a tent large enough to accommodate all of them. You want everything to be so perfect. At this point, buying a tent online or from the nearest tent dealer in town could seem like a viable option. However, once the event is over and done, you’ll never recover the money you spent buying it, and there’s a high chance it will be years until you need it again if you ever will. Storage for the tent may also cost you space and money. This may not be the best example but you get the drill. It’s always important to consider whether renting is a better option before deciding to make a big purchase.
We can go on and on about the importance of thinking twice before making a large purchase. However, the key takeaway is to always ensure you remain within your budget and only buy what you can afford, if and when you need it. It’s also worth considering if there are other alternatives such as renting, saving up, and avoiding debt if the purchase can wait.
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