Planning to make a big purchase sometime soon? Now’s the time to start getting ready. Everyone wants to be pleased with their buying decisions, no matter how much it costs. But, how do you know you’ve made a good investment? Try these five tips and you can be confident you’ll spend your money wisely.
1. Save Up to Buy With Cash
Although most people who buy a home need to get a mortgage, there may be plenty of reasons for you to save up as much as you can. Big and small purchases tend to cost you less if you can pay for them in cash. Fortunately, it does not have to be all or nothing. Building savings to make a bigger down payment on a boat or home improvement will make the payment smaller and possibly allow you to pay it off sooner. Just sock away whatever you can and you may be surprised at how fast it grows.
2. Pay Off High-Interest Debt
You may think it makes no sense to eliminate some debts so you can get more, but there’s a method to it. Having a lot of debt on your credit report when you apply for a loan could make it harder for you to get approved. Revolving debt, like credit card debt, tends to have a higher interest rate than a secured loan you would get for a home or car. If you pay off those high-interest bills before you apply you may cut down on the interest you pay. You could also improve your credit score at the same time.
3. Track the Best Time to Buy
Most major purchases have an annual cycle that could lead to big savings if you time it right. For example, appliances and home furnishings tend to have the best sales in winter. Homes bought in late summer or early fall take advantage of the price drops sellers make to secure the deal before the cold weather hits. If you are willing to accept a smaller selection, buying a car in the fall or winter could help you get excellent deals on the previous model year.
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4. Research Prices and Options
When you go to buy something that costs a lot of money you have to know a fair bit about it. Time spent researching could translate into money in the bank, when it allows you to make a more informed decision. If you buy a home, you should learn about the prices you can expect to pay, and decide which features you need most. Before you spend money on a car or boat, you might look at buying a used model compared to new. Check out websites that organize the information for you. For cars, you might look at:
- Consumer Reports External Link Opens in a New Window
- Cars.com External Link Opens in a New Window
- TrueCar External Link Opens in a New Window
- Kelley Blue Book External Link Opens in a New Window
Research the best places to complete the purchase and how professionals can assist you in making a decision.
5. Get the Most Out of Your Investment
No matter what you buy or how much you spend, it is important to ensure you get something that will work well for you. If you get a great price on a boat that you never use, or a home that does not meet your needs, you have not saved any money at all. Instead, think about what you really expect from the purchase. Set priorities on what you want most, such as convenience, cost or value. Sometimes, the right choice for you may not feel like the best deal in general.
Spending big money calls for a lot of planning, but it is worth the effort. If you put in the time you will appreciate it once you have made the purchase.