We all know the feeling when we see something we want and want to own it right away. But Alas! Life is not that simple. Making a significant purchase is a huge deal – whether it’s a new car, an expensive piece of jewellery, a home theatre system, the latest iPhone, or anything else with a heavy price tag.
It’s exciting if you are finally going to buy it because you are investing in something that will enhance your life. But planning for a big purchase in life is also crucial. After all, flaunting your new phone will give you much joy if you are not living under the stress of being behind on paying bills.
When you plan your next big purchase, it allows you to get what you want without throwing a wrench into your monthly budget. So how to do that? Well, here is a list of 5 critical questions you should ask yourself before buying the next big thing for planning it well. Those are:
- Do I Want This Thing, or Do I Need it?
This is an important question to ask yourself. If it’s something you need, then it’s probably a wise investment. But if it’s something you simply want, you might want to think twice. After all, do you really need that new car, or will your old one do just fine?
Even if you need a new car, which segment will suffice your need? For instance, if you are a small family which can easily be accommodated in a hatchback or a sedan, don’t go for SUVs and premium sedans just because you fancy them.
- Is the Price Affordable for Me?
You should also have a budget in mind before making any big purchase. How much can you realistically afford to spend? You can’t eat instant noodles for the whole month because you bought a new play station! In case you can’t pay for it outright, you may need to finance the purchase. And if you don’t want any debt lying on your head, you need to wait.
Planning the purchase a few months ahead will help. And don’t shift your focus to your emergency fund. Keep that for emergencies like a vehicle breakdown or a hospitalization.
- Should I Get a Finance/Credit for This Purchase?
If you don’t have the cash on hand or can’t wait months for funds to accumulate, you can finance your next purchase by taking a loan. These days, personal loans for significant purchases are easy to get, and there are plenty of lenders to choose from.
A monthly EMI is an easier way to pay for something rather than a bigger amount at once. In case you are unsure about the EMI you can afford monthly, you can use a personal loan EMI calculator to see how much it would come according to your loan tenure and interest rate.
- What’s the Best Possible Deal or Discount Option?
Would it be ok to purchase something expensive and not check any deals or discounts offered? Never spare a money-saving opportunity while buying something costing you nearly half of your monthly paycheque or more.
Always shop around for the best possible deal. Compare prices and features to find the best value for your money. You can find discounted deals through Google or browser extensions such as PayPal. If a big festive sale is coming, it’s better to hold on to your purchase for a few weeks or months.
- How Can I Get the Most Out of My Purchase?
Finally, you should always think about how you can get the most out of your purchase. Let’s say you are buying a new car. You might want to consider a model that will hold its value over time. Or, if you’re planning to finance your purchase, you might want to choose a lender with low-interest rates.
Paying a little bit extra for warranties and insurance also doesn’t hurt. It may seem like an additional expense at the time of car purchase. But its value can be understood in the long run when your vehicle breaks down, or you have an accident.
Making a big purchase is a big decision. But if you take the time to ask yourself these important questions, you can be sure you’re making the best decision for your needs.
Author Bio: Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.