For many people, purchasing big-ticket items like cars, houses and vacations takes time, a lot of research and more money than they currently have. With limited funds, they also want to get the best “bang-for-the-buck.” The good news is that there are many tips that can make this process more successful.
If you find yourself in this situation, here are a few tips to help you prepare and save for your next big purchase!
Budget/Pay Cash
Let’s be real, there are many of us who swipe that credit card when purchasing big items. It is just easy to buy it now and then pay it off as you go, right? Well, yes to an extent. If your credit card has a 0 percent interest rate for the duration of the time it will be paid off, then that is a pretty good deal! But if not, chances are you’ll be paying interest on it on top of the item’s price which adds to the total cost. Instead, try saving a little each month for that big purchase. That way it will save you interest in the long run.
To make savings easier, set yourself a goal of how much to save by a certain date and then work backwards to determine how much you need to save each month. Then set up an automatic transfer from your checking account into an account that is more difficult to access so you aren’t tempted to spend the money on something else.
Another helpful tip to keep on track with your savings plan is to tell friends and family about it. That way, you will feel accountable to them when they ask how it’s going. Sometimes, as humans, we just need that little extra encouragement to keep focused.
Once you have saved a good amount and are ready to make a purchase, there are steps you can take to make sure you are getting the most bang for your buck:
Shop Seasonal and Holiday Sales
Most stores that sell big ticket items have promotional sales a few times a quarter. We have all seen the ads/commercials for the “BIG LABOR DAY SALES EVENT” or a BOGO sale. While some of these sales aren’t the greatest for getting a good deal (always make sure to read the fine print), sometimes they are! If you are buying an item that costs $5,000, a 10 percent off sale will save you $500! That is a pretty good deal.
Check out Resale and Refurbished Items
While most of us would love to buy a big ticket item that is brand new, sometimes it could just be a waste of cash. A great example is a car purchase. While there is a time and place to buy new, you could get just as good of a used product for a great deal. Also keep in mind that a new car that costs $35,000 will lose approximately 10 percent of its value after about a month of ownership. Unless it’s been extremely abused, there isn’t much of a difference between a brand new car and one that has a year or two on the road.
Sign Up for the Email Alerts and Get a Browser Extension
While most dread getting tons of promotional emails, only to painstakingly go back and have to unsubscribe from them all, these could actually help you find the best deal for the big item you are looking for. There are several browser extensions (Botta Rakuten Honey) that will look out for the best deals and send you email alerts when they find the best one! (Savings pro tip - Set up a special email account just to receive alerts about sales so they don’t overwhelm other important messages from work, family and friends.)
If you need some financial tools to make saving for big ticket items easier, feel free to call us at Select FCU to discuss what might work best for you.
