Avoid buyer’s remorse and debt on major purchases with these helpful tips.
With it being tax season, many of our customers have a little extra money in their pocket from their state and federal tax returns. Often, people will use their tax returns for major purchases, such as a down payment on a new car, or projects like installing new counter-tops in their kitchen. However, before you run out and spend your hard earned money on a big purchase, here are five questions you should ask yourself to ensure you are spending your money wisely.
- How will it affect people in my life? Major purchases, such as a new vehicle or home renovations, affect multiple people. When you are considering making a sizable purchase, it is important to talk to the other members of you family that will be affected. For example, before you agree to purchase that brand new ATV, you should talk to your spouse about his or her feelings and concerns. You may realize with their input that now is not the best time to buy, or the price is just too unreasonable given other expenses.
- Is it a replacement, or an addition? If you are buying something new rather than replacing, it is worth asking yourself if you really need the product or service since you have survived without it up until now. For example, if you are thinking of buying a new truck, but rarely haul necessities, do you really need it? On the other hand, if you own a truck that is worn out, or have frequently borrowed a truck from friends and family, it may be worth the investment to purchase one for yourself.
- Is it worth the time you worked to earn it? Before you spend your hard earned money on a product or service, ask yourself if what you’re looking to buy is worth the hours spent at work away from family and friends to earn your income. For example, is a pair of shoes worth a week’s worth of your salary? Most people would say no, so if the value of the item balances with the amount of time it took to earn the money to pay for it, then it may be a reasonable purchase.
- Do you have a good purchasing track record? If you have a history of not making the best purchasing decisions (regret, mountains of debt), you may want to give some additional thought to whether you’re making the best decision. Consult family and friends for different perspectives, and make a decision that will benefit your life rather than just satisfying a current want.
- Could you get a better deal? Be sure before you swipe your credit card that you are getting the best deal for the product or service. If you could possibly get it for a better price at another business, or wait a couple weeks for the item to go on sale, consider delaying gratification to save a little money.Follow the On the Better Side of Life Blog for loads of info and helpful tips when it comes to your finances, as well as First Reliance services. At First Reliance Bank, there is more to banking than money.