So Many Shoes, So Little Money – Blog

Big Ticket Purchases

April 25th, 2009

Shopping for big ticket items is no different than shopping for smaller stuff – except of course for the stress, price and worry that you are about to make a HUGE mistake. Seriously, there are a lot of things you will want to buy (a car, a house, an education, designer clothes, shoes and bags) which are a big investment and require a lot of money and/or a lot of debt. Making the right decision involves four things (plus courage):

1. Sorting your wants versus your needs (you want Chanel you need a purse)
2. Doing your homework (research)
3. Timing your purchase correctly (believe it or not, many big ticket items like cars have times during the year when they are cheaper than other times)
4. Determining your financing (how you pay has a big effect on the total price)

Just think of big purchases as ultimate shopping. First, you must sort your wants versus your needs. Before you invest your hard earned money on anything that is expensive, you need to know why you want it, if it is the right thing for you, and if there is a more affordable substitute that will satisfy you.

Second, you must do your homework. I know it is hard work, but it is important to know what you are doing before you do it. You must do research. Every big ticket item you buy has these kinds of questions and more. You wouldn’t let someone buy you diamonds without knowing the four C’s would you? You must research the questions and figure out your answers. Do your homework by researching on the internet, asking your friends and family and by talking to professionals.

Third, you need to time your purchase. You need to know if it is the right time for you personally (why now and can you afford it) and if it is the right time to buy the item. Some big ticket items have times during the year when you will get a better deal. I know you know all about sales!

Finally, how you pay for what you buy has an effect on the total cost and whether this is the right decision for you. This is true for any big purchase. The more of your own money you pay the less money you will need to borrow and the cheaper the money you borrow will be. In addition, the less you need to borrow, the better your net worth and the better your credit score and the lower the interest rate. You need to save as much money as you can before you make you make your purchase so you will have to borrow less money to get it.

Filed under: Shopping

Tags: spending