This post may contain affiliate links, allowing us to earn a commission on the products we would recommend to our families and closest friends. You can find more info on our Legal Stuff page.
Sure, saving is great. So is buying the odd treat. Both of these things are likely quite common to you at this point. You know how they go; you know the pitfalls to avoid. But what about when you have to make a large purchase? What do you need to avoid, and what do you need to make sure you do?
What is a big-ticket item?
A big-ticket item is an extremely expensive purchase, like a house or a car. Due to their large prices, big-ticket items are rarely paid in one go. Instead, you pay some immediately and the rest in installments over time. These installments are often subject to interest, again adding to the cost of the big-ticket item.
When will you buy a big-ticket item?
There are two times you might buy a big-ticket item. One: when you plan ahead to buy it. This could be like saving over the years to buy a house. Two: when you unexpectedly have to make a big-ticket purchase. This could be if your car breaks beyond repair and you have to buy a new one.
The first scenario is more desirable. In that situation, you can plan ahead, save and ensure that buying a big-ticket item is a smart choice for your finances. In the second scenario, you have to make a split decision, which can sometimes have negative ramifications.
Dos of buying a big-ticket item
Look again at your budget: The repayment on a big-ticket item is often costly. Because of this, you won’t be able to spend at the same level you have been before. Therefore, it’s crucial that you redo your budget. This way, you can ensure that you won’t run into financial issues later down the line.
Speak to a financial specialist: If there are areas you are unsure about, speaking to a professional can help. People like Barr Rosenberg can fill you in on gaps in your knowledge. They can help you figure out the best repayment plan or budget so you can afford an unexpected cost.
Don’ts of buying a big-ticket item
Buy on a whim: Big-ticket items are a significant investment, so you should never buy one on a whim. As previously discussed, there are some scenarios in which you have no choice but to buy one quickly, but if you have the choice, you should never do so without planning. Going into buying a big-ticket item, you should always plan ahead and have several months of saving to ensure you can afford it.
Forgetting research: All big-ticket items will cost different amounts, even if they are selling the same thing. For this reason, it is so crucial that you research. Checking out the other options available to you can only benefit you to find the plan that best suits your financial situation.
Be careful buying big-ticket items
Though big-ticket items are a significant investment, they are also a benefit to your life. Yes, they are expensive, but due to this they often make a big difference to your everyday living. Enjoy it, but also be careful, considering they are so costly.
Comments (0)