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How to Make a Major Purchase

The following post is from Christina of Northern Cheapskate:

Appliance Store Refrigerators

We clip coupons, we plant gardens, and we do our laundry in cold water.  Sometimes we agonize so much over saving money on the little things, that we forget how much money we can save if we put the same amount of thought into the big purchases we make.

Determine need and speed.

When a major appliance dies or the air conditioning quits in the middle of July, you can feel a lot of pressure to make a decision and to make it quick.

And when it comes to making a major purchase of something you want instead of something you need (like a new TV or computer), you have more time to make a good decision, but you may be anxious to make your purchase because you want it and you want it now.

Just remember that there is almost always more time than you think to decide.  For example, when our dryer died during the winter, we felt a strong push to replace it right away.  But instead of rushing out to buy a new dryer and paying more than we wanted to, we strung a clothes line across our laundry room and used drying racks for a few weeks before we bought a new dryer.  We were able to get a better dryer at a better price, by making do with what we had for awhile.

If it is an urgent need, you may not get months to decide, but you certainly can take a day or two to figure out a plan. Taking a step back to assess your situation (what you need, what you want, and what you can afford) can be one of the simplest and biggest things you can do to save money on a major purchase.

Do your homework.

If you’re serious about saving on your next major purchase, be prepared to get to know the subject inside and out.  Consult Consumer Reports, do a web search, read product reviews, and ask your friends and family.  Ask questions at the store.  Learn what the trends are.  Are you buying something that may be obsolete two years from now?  If you wait three months will a new and improved model be on store shelves?  What accessories will I need? Will I be able to afford to keep up with the maintenance of this item?

Set a budget and start saving.

If it’s something you need in a hurry, hopefully you have an emergency fund to tap.  If not, you’ll need to figure out how to finance the purchase and pay it off as quickly as possible.

If it’s a new toy or gadget you want, start setting aside any money you save into a special fund.  New gadgets paid for with cash are always more fun than ones paid for with plastic.

Get the best price.

Consider buying secondhand at estate sales, eBay, or Craigslist. Shop around for the best price. Ask your favorite store if they will price match their competitors. Don’t be afraid to ask for discounts.  I’ve said something as simple as, “I’m spending a lot of money here, is there any way you could cut me a deal?”  and it has gotten me free delivery and $50 off the price.

Consider purchasing a display model or a scratch and dent model (just make sure the warranty is still valid).  The tiny dent on the side of my refrigerator saved me $50 and no one can see the dent because it’s against my kitchen wall.

Be wary of the up-sell.

Many salespeople work on commission and will push you to buy additional things like accessories and extended warranties. One purchase often leads to another, so be sure you know what options you may encounter when you’re making your purchase and decide ahead of time what you may be willing to consider.  (This is especially good advice for when you’re buying a cell phone!) Just because a salesperson says you can upgrade for just $20 more, doesn’t mean you should.

Just remember, when you shop intentionally and really think through a purchase, your wallet will always fare better than if you just rush out and buy what you need when you need it.

What things do you consider when making a major purchase?

Christina Brown is the creator of Northern Cheapskate, a blog dedicated to frugal living through coupons, freebies, and money-saving ideas. She lives in the rural north woods of Minnesota where she clips coupons, pinches pennies, and chases her three boys (a 7-year-old and twin 5-year olds) as a stay-at-home mom.