Large purchases can be defined in many ways, depending on what you’re looking for and your household income. It could be you want to upgrade to a new car, replace a broken washing machine or even go really big and buy your dream home.
However, before setting your sights on buying big, there are a few key questions to ask yourself – to make sure you won’t be overstretched paying for it.
Do I really need or want this?
One of the most important questions to start with is why you need the item. There will inevitably be cases where you have to spend big on replacing a broken boiler, but do you really need the latest flat screen TV? Deciding on whether large purchases are essential or luxury items is crucial, and if a purchase isn’t an urgent need then you may want to wait until you’re in a better financial situation.
Can I afford to buy it now?
Once you’ve established the need for a big ticket item, you’ll need to figure out if you can afford to buy it. If you’re in a position where you have the cash to buy upfront and it won’t eat into your rainy day savings then great, but if you don’t then you might have to look for alternative means. Whether it’s putting together a savings plan or investigating loans and personal finance, there are plenty of options to help you on your way to making a big purchase.
Should I apply for finance?
If you aren’t in a position to pay outright and there isn’t the time to save up, there are finance options available. However, before you’re considering large loans, make sure you fully weigh up the pros and cons and ask yourself “how much finance can I afford?” Big loans for buying a car or house can seriously affect a household income, so get an idea of how much you’ll need to borrow and calculate if you can afford to pay for the finance without having to drastically impact your finances. Try our quick and easy personal finance calculator for an instant estimate.
Is it a good investment?
Many people often choose the cheaper option as it seems more affordable at the time. But in fact, opting for a higher quality item that may cost more in the initial outlay, can in fact save you money in the long run – as it’s likely to last longer and you won’t have to continually pay out for replacements or repairs. Similarly if you’re buying a house as a couple, you may want to consider future plans, like having children – will the property you’re buying be able to accommodate a growing family? Or is there the option to expand further down the line if needs be?
Can I get a used item for less?
Depending on what you’re buying, you may well be able to find quality used items like washing machines, televisions and cars that will still deliver high quality products but you’ll pay less for them.
Whatever you’re intending to buy, make sure you have all the reasons for the purchase and how you’re going to pay for it clearly outlined. At Pegasus Personal Finance, we have big purchase finance options to suit everyone, whether you’re buying a house, boat, car, caravan or household item. Simply apply online for a no obligation quote in under an hour.
