Planning for Big Purchases

Be it a house, a car or a major appliance, big purchases are a fact of life. The following tips can help you get the most for your money.

1. Assess your true needs. Take the time to think about what you need to accomplish by making the purchase. Is it a reliable car to get you to and from the bus stop? Or maybe a house in a particular school district? This will help you identify the features and details that should drive your decision process.
2. Set a budget. Know how much you can afford to spend before you go shopping or house hunting. There are a lot of deals these days, and it's easy to be tempted by great values and overspend.
3. Do your homework. Become an expert on the item you wish to buy. Whether it's a home, a car or an appliance, there are many resources that can help you make an informed decision, including online product and price comparison tools, consumer guides or even your friends and family.
4. Shop the off-season. Retailers are often looking to clear floor space before the next year's models and inventory arrive. Remember to consider seasonal sales. For instance, consider buying a grill or new outdoor furniture at the end of summer when those items go on clearance.
5. Take your time. Don't feel pressured to sign on the dotted line. Ask the retailer or seller questions about anything you don't understand before you buy. If you're feeling pressured, it may be best to walk away.
6. Negotiate. It doesn't hurt to ask. The list price isn't necessarily the lowest price, but be reasonable with your request or bid.
7. Consider hidden costs. With many items, the purchase price is just part of the cost of ownership. Factor in the expense of relevant extras such as insurance, maintenance or fuel when comparing your options.
8. Try it on. You wouldn't buy a car without test driving it first. Consider "test driving" other major purchases as well. For instance, visit a house you may be considering buying at different times—day, night, weekend, etc.,—to get a feel for the neighborhood, traffic flow, noise level and more.
9. Check your credit report. Review your credit report prior to making any large purchase and take steps to correct any errors. Knowing your credit score before you start shopping helps to arm you with as much information as possible when negotiating and when considering financing options.
10. Carefully review extended warranty offers. Before you spend the extra money, carefully review the offer, taking into consideration things like the value of the item being purchased and the length of the manufacturer's warranty. Also, be sure you understand exactly what the extended warranty covers. In some cases, it may make more sense to build your savings over time to cover future repairs rather than paying for a warranty up-front.