Whether it’s a new car, a starter home, a high-tech entertainment system, a new laptop or anything else with a somewhat hefty price tag, making a big purchase is a big deal.
It’s exciting, of course, because you’re buying something that’s going to improve your life in some way, but it’s important to plan for a big purchase. That way you can get your hands on what you want without throwing a wrench into your monthly budget — because something like a new video game console is much easier to enjoy when you know buying it isn’t going to set you back on paying bills or force you to eat ramen noodles every day for the rest of the month.
Here are four things to consider when planning for your next big purchase:
1. Consider how it will fit into your budget
Unless you have enough saved to pay for a big purchase in one lump sum, you’ll generally find yourself paying for your big purchase in installments over time. If this is the case, you’ll want to take a look at your personal income and your average monthly spending so that you’ll know how and where your big purchase will fit in. Ideally, it will fit seamlessly into your budget, but if not, you can look at ways to save on other expenses to accommodate the new payments you’re going to be making. For example, it’s amazing how much you can save if you dine out fewer times per month. (And, even if you do have enough saved to pay in a lump sum, you should still make sure it’s not going to sap your savings below the threshold of what you might need in case you incur an unexpected expense.)
2. Make sure you’re getting the best possible deal
You don’t always have to jump at the first product or price tag that you come across. Sometimes it’s beneficial to take the time to look into other deals to ensure you’re getting the best value for the product or asset you’re considering buying. Ask yourself if you’re going through the right retailer, if you’re getting the make or model that best fits your wants and needs and if you’re poised to make the purchase at the right time. Often, if you’re able to wait a couple weeks or months instead of buying in the moment, you can get a better deal — there are holiday sales, seasonal markdowns, peak selling and buying periods and other variables that can result in your finding a better deal. For example, if you’re looking to buy a house, the best month to find a great deal is October, and the worst is April, according to data gathered by RealtyTrac.
3. Identify the best way to pay
There are generally different payment options for your purchase, depending on your financial situation, budget and personal preference. In some cases, you might want to pay in one immediate installment. In others, you may want to set up a payment plan or put it on a credit card and pay it off over a period of time that works best for you. And for many purchases, the best way for you to pay is through a low-interest loan — especially if you need to make the purchase but don’t have the funds readily at your disposal.
4. Figure out how to get the most you can from your investment
Ideally, a big purchase should last a long time — and to get the most out of your investment, you may want to protect it. Big-ticket items often come with warranty options and service or insurance plans. You’re going to want to take a good hard look at all of these options and choose which — if any — are best for what you want to get out of your purchase. While something like an insurance plan may seem like a superfluous expense at first glance, it may also be more than worth your while in the long run. It’s best too to educate yourself about your protection and investment options before making the move to buy, as it’s more difficult to make the perfect decision if you’re put on the spot at the moment of purchase.
If you’re looking to save a little more money that you can put towards a big purchase (and aren’t we all?) you might want to look into a Santander Bank Simply Right® Checking account. It comes with four easy ways to get the $10 Monthly Fee waived. All you have to do is make one deposit, withdrawal, transfer or payment each month. An extra $10 a month adds up over time, and every little bit of extra cash helps.