Before you whip out your credit card and make a purchase that could haunt you later, it’s important to pause and check in with yourself. Here are six essential things you should do before making a major purchase that’ll help you prevent financial regret.
Ask Yourself What “Major” Means
What do you consider a major purchase? $500? $1000? If you’re going to have separate rules for major purchases, outline what makes them major. It can set the stage for your decision-making process and help you re-evaluate your financial situation before you get too excited.
Research Like a Pro
Research the product you’re considering—read reviews, compare prices, and check out alternatives. This isn’t just about finding the best deal; it’s about ensuring you’re making an informed decision about what you’re doing with your money. You might find that what you’ve been eyeing up has a ton of flaws or issues. Google is excellent for this, but sites specifically designed to empower consumers with knowledge, like Consumer Reports, are equally great places to start your search.
Make or Check Your Budget
Now that you’ve defined what a major purchase is and done your research, it’s time to talk numbers. Creating a budget is essential to ensure that you’re not overspending or putting yourself in a financial bind, no matter what you’re buying. Hopefully you already have a budget, but if you don’t, make one. If the purchase exceeds the budget, save for it instead. You might even find that by the time you have the money you don’t even want it anymore.
Consider the Long-Term Impact
Before you hand over your hard-earned cash, think about the long-term impact of your purchase. Will this item bring lasting joy, or will it end up collecting dust in a corner like that bread maker you bought on a whim? Ask yourself how often you’ll use it or if it’ll improve your life in a meaningful way. Any hesitation or difficulty answering these questions could be telling you to reconsider so you don’t get buyer’s remorse.
Get a Second Opinion
Sometimes, all you need is a sounding board. Before making a major purchase, talk it out with someone you trust—whether it’s a partner, friend, or even a financial advisor. Chat with anyone who usually gives you insights you don’t often consider and avoid chatting with someone who you know will tell you it’s a good idea (we all have those friends who go a little too hard into “retail therapy”).
Sleep on It
The best thing you can do before making a big purchase is to sleep on it. Give yourself a night to mull over the purchase, and you’ll gain some likely much-needed clarity and perspective. Set a deadline for your decision. If you still feel excited about the purchase after a good night’s sleep, that could be your signal to go for it. But if your enthusiasm has waned in the harsh morning of reality, it might be a sign that you’re better off saving your money for something else.
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