5 Questions to Ask Yourself Before Making a Big Purchase

Ask yourself these 5 questions before you make a purchase.

So you’re about to write a check, hit “buy now,” or fork over a wad of dollar bills to make what could be considered a “big purchase” (which is of course subjective, but we’re talking about something that requires a chunk of change, like a home, a car, a computer, or new piece of furniture, etc.). 

Big purchases like this can be stressful — we tie emotions to the transaction because we’re investing a lot of our time and effort (represented by the sum of money we are spending) into the decision. That’s why discernment and reflection on your motives for making the purchase — and your ability to pay for it — are worth considering carefully before parting with any amount of money. 

Before you become the proud new owner of an expensive new _________, there are a few questions you should ask yourself to ensure you’re making a sound financial decision. 

Is it prudent? 

First of all, consider whether your decision to make a big purchase is prudent. To be prudent means to be wise, acting in a way that thinks about the future and the consequences of actions. Will you be happy you made this purchase one year from now, or will you regret it? How does this purchase fit with your other financial goals and your current state in life? What is the purpose of investing in this purchase? 

Have you done your research? 

Have you thoroughly researched the item you intend to buy, or is this more of an impulse purchase? Most U.S. consumers spend about $5,400 a year on impulse buys — purchases made with little to no planning or research. Arguably, not all impulse buys are a bad thing, but any wise consumer should only spend a large amount after having thoroughly explored all options, with confidence that this purchase will serve its purpose well and for the long-term. 

Can you afford it?

This is perhaps one of the most important questions to ask yourself when making a big purchase. Is this purchase reasonable, given your income? For example, if you’ll need to take out a loan for this purchase, consider what this will do to your debt-to-income ratio, or your total monthly debt payments divided by your monthly income. NerdWallet reports that a consumer should generally be able to sustain a debt ratio of 20 percent, but that a ratio of 40 percent or higher is dangerous. 

Calculating what big purchases will do to your debt-to-income ratio is one way to gauge whether you’re on financially sound ground or not. You’ll want to carefully consider if you plan to make monthly payments, and outline a plan for paying the loan off as quickly as possible, too.

What are your motives for purchasing?

Be honest with yourself and ask yourself why you are making this purchase. Do you need this item? Do you simply want the item? There’s a difference! Are you buying it to keep up with appearances, for status, for recognition, or to show off on social media? 

Consider the moment that seemed to initiate your desire for this item. Perhaps you’ve had an unreliable, faulty television for months and have been doing research to buy a new one for several weeks. This is a healthier approach to making a big purchase than seeing an advertisement for the latest TV and impulsively going to buy one when you don’t have an established need or have done any research.

Do you have peace?

And lastly, do you have peace with the idea of this big purchase? Does it feel like the right thing to do and are you (and your spouse) in agreement on the issue? Or does the thought of it give you anxiety and cause arguments in your family? Spending large amounts of money in one place is always a little bit stressful, but take care to identify the difference between this type of stress and the stress that comes from feeling rushed to make a decision you aren’t prepared to make. 

Big purchases can be fun but equally stressful. The best way to ensure you don’t suffer from buyer’s remorse is to take your time planning a big purchase, and ensuring that your motives for doing so and current financial situation are both sound enough to move forward. With careful planning and honest introspection, you can ensure you actually enjoy — instead of regret — your big purchase months and years from now! 

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