The beginning of a new year is quickly approaching, and that usually means emerging from the post-holiday slump and beginning to think about what the upcoming year will look like for you, whether it’s your career, travel plans, future investments, and so on. And in a lot of cases, planning these aspects of your life involve making some big purchases, such as a down payment on a car or home, appliances, home renovations, college tuition, or even non-essential “for fun” purchases. If you’re going to be making some significant purchases in the upcoming year, it’s important to start planning early. Here are a few ways you can get ahead of the game as this year wraps up.
1. Identify Needs Vs. Wants
Depending on the purchase, you first want to determine what your absolute must-haves are. Perhaps you’re planning a wedding reception, and you know you need a venue big enough to fit the number of guests attending, or you are buying an RV, and it needs to be the right size and have the right utilities for your family. Or maybe you’re buying a car, and you have a set budget limit, so you need to focus on what you absolutely need first (a healthy engine, good tires, etc.).
If you don’t first determine what you need before you include any additional wants, you can easily break your budget and overspend on non-essentials. All the bells and whistles of a big purchase should come after the necessities, if there’s room for them at all.
2. Determine How Much You Need to Save (And Your Timeline)
If your big purchase for next year is not urgent or time sensitive, you have some time to save. First, determine how much you’ll need to save, how long of a timeline you have, and how much you’ll need to put aside and how frequently. As mentioned, start with the bare bones of necessities only and that’s how much you know you absolutely must save in order to make the purchase. If you have wiggle room in your income and time to spare, that’s where you can sprinkle in some add-on savings.
It’s also important to be realistic about your income, your budget, and how much you can afford in the grand scheme of things when deciding if you can make a big purchase or not. If you are barely skimming by on bills, groceries, mortgage/rent, etc., it may not be the right time to invest in a hot tub or a flashy new car. If your savings goal doesn’t seem possible, you might need to lower your target or extend your timeline.
3. Shop Your Options
It’s almost never a good idea to go with the first option you find when making large purchases. There are so many options on the market for you to choose from, and you’ll never know if there is a less expensive option out there if you don’t take some time to shop around. There are truly options for everything—homes, vehicles, loans, airlines and hotels, credit cards, home appliances, roofing—you name it.
4. Reach Out to Your Banker
Bankers and financial professionals are exactly that—professionals! That’s why when you’re preparing to make a big purchase, talking to your banker can help you understand the details, like whether you should pay using savings or if you need financing, if your financial health can withstand the purchase, and how you can make large purchases without going underwater.
At Republic Bank, we are dedicated to helping you with these big purchases, which often are parallel with big life moments. Contact us today by calling 800-526-9127! Plus, find more financial tips and resources here.
