5 Questions to Ask Yourself Before Splurging on a Big Purchase

questions before a big purchase

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.

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