When my girlfriend first brought up the idea of spending $375 on a vacuum cleaner, I was floored. I couldn’t imagine spending that much on a material item unless it hurled me down the highway at 70 mph. That’s one thing the Dyson V7 Animal can’t do, she said.
After overcoming the shock, we challenged ourselves to figure out whether spending more on a home appliance was worth it. We also devised a stress test to ensure we were even considering the right model among equally expensive options.
Why you might spend more on a home appliance
When you earn a salary, you start to put a price on your time. After all, that’s what your paycheck gives you — time to do other stuff besides work.
In our case, we saw this newfangled vacuum as a time saver. No cord to wrap up after each use. No filter or bag to change out. And no lugging a heavy machine all over the house.
There are other reasons you might opt to spend more on an appliance. Aside from hoping that it lasts longer, you might count on higher performance.
A lower-cost stovetop range, for example, might offer about 7,000 BTUs (a measure of heat produced) compared to a luxury model’s 15,000 BTUs. That difference might show up in the time it takes to boil water or the way meat cooks on the grill, according to Bray & Scarff.
You might also consider how a more expensive model affects your monthly bills. Say you’re in the market for a refrigerator. Buying an Energy Star-certified fridge, for example, could save you more than $270 over five years, according to the government-backed organization.
So if you’re looking at spending an extra couple hundred dollars on an energy-efficient model, take your electric bill into account. It might shift the scale.
Plus, remind yourself of the age-old adage that says being cheap now could cost you later.
A stress test for big purchases for your home
Our December 2016 survey said that one of your biggest money regrets was making a big purchase. You’re more likely to have regrets about a purchase if two things are true: You stretched your budget to make it happen, and you feel that the product wasn’t worth it in the end.
That’s where our stress test comes in. After all, it’s one thing to spend more money than you would on a cheaper alternative. But deciding whether you should is another story.
Next time you’re considering a big purchase, ask yourself these five questions:
1. Do you need it now?
My girlfriend and I have an unusual reason for needing a good, easy-to-use vacuum. We love to play beach volleyball, and we tend to bring sand home with us.
That helped us rationalize spending so much on an appliance despite renting a small apartment.
You might ask yourself whether you need your big-ticket item now or in the future. It could make more sense to wait on buying new kitchen appliances, for example, until you’ve laid down roots in a home.
2. Have you found the right one?
Once you decide you need an appliance in the near future, you’ve done the easy part. The hard part is finding the right model to splurge on.
In our case, we had friends who said a particular vacuum was the perfect solution. We tried it out at their house. Then we went home, watched YouTube video tutorials, and read consumer-oriented articles on the pros, cons, and best uses for the vacuum. We did the same for competing models.
No matter what you’re thinking about spending money on, take the time to research your options. Forget about the cost for a minute and just find the top two or three models that meet your everyday needs.
3. Have you compared prices?
Now that you have some contending products, take the time to see how they’ll hit your wallet. Analyze the differences between a product that costs $100 and a similar but seemingly better product that costs $200. Ask yourself if the more expensive option actually offers more quality.
Then, move beyond the product’s price. Consider other factors, like:
- Operating costs: Which model will save you the most on your energy bills?
- Warranty options: Which brand offers the longest or broadest warranty?
- Price-matching and return policies: Which retailer guarantees your satisfaction?
- Rebates and tax credits: Which model is most likely to earn Energy Star discounts?
You might brush off a $50 difference in sale prices, for example, if the more expensive item is likely to lower your electric bill.
In our case, my girlfriend and I elected to choose a more expensive model offered at Costco, in part, because of the wholesaler’s famously generous return policy.
4. Have you figured out the best way to pay for it?
If you have the cash on hand to take the leap, this part is pretty simple. You could opt to use a credit card to score rewards. My girlfriend and I used our Costco Anywhere Visa Card by Citi to receive 2 percent cash back. Then, we paid our credit card bill the next week.
Not having the savings to make your large-but-necessary transaction complicates matters. Instead of using a credit card or resorting to a personal loan, consider the alternatives to creating debt.
The safest route is to set a savings goal and stick to it. You could set aside 10 percent of every paycheck, for example, until you have the cash you need to pay for the item without creating debt.
5. Have you slept on it?
Since you already know you need this item and have zeroed in on the right product at the right price, you might not need to follow the 30-day rule. The 30-day rule is one of many ways to save money; it asks you to wait a month before moving forward on a big purchase.
Instead, sleep on it. (Unless the big purchase is a pillow-top. In that case, you should sleep on your old mattress one last time.)
After all, if you’ve gone months or years without this product, you can go one more night. It’s possible you wake up the next morning and feel glad you didn’t rush the whole thing.
If you answered yes to every question …
Congratulations! You might be ready to spend more on an important item than you would spend on alternatives. Remember, however, that paying more for something doesn’t mean you’re getting something better.
Whether you’re planning to spend $100, $375, or even more, put in the time before swiping your card or handing over the cash. Look at your purchase as an investment. This way, you’ll be more likely to enjoy it and forget about the sticker price altogether.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|