7 Questions to Ask Yourself Before You Make a Big Purchase

Couple admiring the big purchase of a top-of-the-line range in an appliance store
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It's important to make sure that you're financially ready to make a large purchase--and that it fits in your budget. What qualifies as a big purchase can vary from person to person, taking into account your household income, amount of debt, or size or your retirement savings.

When considering a large purchase, ask yourself the following questions before signing on the dotted line.

Do I Have Cash to Pay for the Item?

If you can afford to pay cash for the item—without depleting your emergency fund— then you should be okay purchasing the item. Not needing to pull emergency fund money means that the purchase should not adversely affect your current monthly budget.

If you do not have the cash to cover the purchase, do without the item until you have enough money to pay for it in cash. Whenever possible, avoid making big purchases on credit cards.

Do I Really Need This Item?

Asking if you need the item helps you think about whether you need it or if it is something you simply want—a luxury purchase. If it is a luxury purchase, be sure that you can afford it and that you can pay cash for it. If it is a true need, then you need to determine why you need it and when.

For example, you may need to buy a car, since yours needs frequent repairs. But you do not need a top-of-the-line flat-screen TV. Determining if the purchase is a want or a need can help you to prioritize it in your budget.

If You Do Need the Item, Do You Need It Right Now?

If you do need the item, but you do not currently have the cash for it, is there any way you can do without the item for a short time?

For example, ​if your dryer has stopped working and you need to purchase a new one, can you hang your clothes out to dry, or use your local laundromat while you save up for a new dryer? You may also be able to borrow the item from a friend or family member while you are saving up to purchase one of your own. You can also set up a sinking fund to help you save up the costs. 

Can You Find a Used One that Will Work?

Looking for used items is a great way to save money on a big purchase. You can buy lawnmowers, refrigerators, freezers, and almost any other item used for a fraction of the cost of a new item.

Often you can buy professional-grade appliances and tools this way and end up with a better quality item at a lower price. Take time to research your items to determine if it's a good purchase.

Is It Worth the Investment to Purchase the Higher-Quality Product?

It may be worth the money to spend extra to get the top of the line product that will hold up to wear and tear and last longer. For example, you can purchase an average vacuum cleaner at a store for anywhere from $50-$80, but these vacuums often break after a year or two.

If you purchase a more expensive vacuum for $500 with a five-year warranty, you may end up saving more money than if you bought a cheaper vacuum and had to replace it a year or two later. This quality issue is especially real if you can purchase the expensive vacuum on sale.

When Does the Item Usually Go On Sale?

There are cycles of sales in retail. If you can wait a month for two, you might save a bundle by waiting for the sale. For example, the best time to buy a lawnmower is in October when stores are discounting them to make room for winter items. Memorial Day and Labor Day weekends also tend to have good sales, as does Black Friday. Just before the Super Bowl is a time when televisions go on sale.

Have You Done Your Research?

When you purchase a big-ticket item, you should take the time to research the reviews and issues related to the product thoroughly. You should find a product that has the features you want at the best value.

Read product reviews, check out reports on the durability of the product, and even check the resale price to see how well the value holds up. Then, you can be sure you are making the right purchase for you.

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