Some of us are great with money. We save a lot, diversify our funds and think carefully about how and what we spend our money on. And some of us struggle with money. We might make enough but don’t save nearly as much as we should and we spend impulsively. Others might live paycheck to paycheck and are constantly thinking about a way to get ahead. If you fall into the struggling with managing money category, read our questions to ask yourself before making a large purchase to help you make more sound financial decisions.
- What would this money be better spent on?
Is what you’re about to buy going to break the bank? Is it enough to pay for a few weeks of groceries? What else could this money buy that’s more important? Take some time to think of other ways you can spend this money before making your decision.
- Can I get this item for a better price?
Depending on your budget, the definition of a large purchase will vary, but it’s always in your best interest to comparison shop. Search for the item and use the Shopping tab in Google to easily compare prices. You can also visit coupon websites to look for additional savings.
- Do I have enough cash on hand to pay for this?
Have you been squirreling away money for some time to pay for this? Perhaps you came into some unexpected money, like a bonus from work. Either way, you want to ensure you have enough liquid funds to pay for your item and still have enough money left in your bank accounts for any unforeseen circumstances. Remember, if you have to put in on credit, it means you can’t really afford it and you’ll end up paying more once interest is added.
- How much time do you have to put into at work to pay for this purchase?
Calculate the total amount of hours you’ll need to work to pay for this item and then ask yourself if it is really worth the price.
- How often will I use this item?
Right now, you’re probably considering this item a must have, but how often will you really use it in the future? If this is something that is a phase, a fad or something that you might only use a few times a year, you may want to rethink your decision.
- When was the last large purchase you made?
If you’re someone who falls into the first category we talked about at the beginning of this post, then there’s nothing wrong with the occasional indulgence since you can afford it. When those occasional indulgences become habitual ones, it can lead to messy finances and possibly long term debt. Ask yourself when the last was that you bought something expensive. If you’ve been careful with your spending and have saved enough so you can afford this purchase, #treatyoself. But if you just spent money on something pricey, waiting a while before buying something new is in your best interest.
Sometimes, with life’s curveballs, we have to buy something out of necessity that we might not be able to afford. Perhaps your washer or dryer broke, your car needs a new transmission or you have an unexpected medical expense. Westport Federal Credit Union’s Whatevah Loan can help with those curveballs. You can apply online 24/7 here or visit our Main Office to apply in person.
For wherever you are with your finances, Westport Federal Credit Union can help. Secure your financial future with us.