No impulse buys!

Samsung UN50H6350 50-Inch 1080p 120Hz Smart LED TV

 

I thought I'd write about this since our family recently decided that we would like to save up for a new LED TV.  Believe it or not, our TV is still a projection television. Most of our friends don't even know this because our TV fits perfectly into our entertainment center with maybe an 1" of space to give. The clarity is not bad as we do get HD quality picture. But compared to the new LED TVs these days, there is a noticeable difference.  We just don't know any better but maybe its because we seem to be watching mostly cartoons these days.

 

However, because an LED TV is a "want," it is obviously not budgeted; nor are we willing to tap into our savings to buy one. So we've now set out to save up the money for our eventual purchase.  Below is the process we always take when buying large purchases: 

 

STEPS FOR MAKING LARGE PURCHASES

 

STEP #1: ESTABLISH A BASELINE FOR THE ITEM YOU WANT

Consider the item you want to buy and carefully evaluate which features you absolutely must have and which features you are willing to live without. This is important because it will allow you establish a baseline to compare the item your buying and ensure they are on an equal playing field as you do you research on the item.

STEP #2: DO YOUR RESEARCH

This is the fun part, as you get to shop around and try to find the best deal. Now that you have a baseline for the item that you are looking for, it should be pretty simply to determine the best deal. 

 

Find the best deal: It can really pay to search a bit to find a good deal on an item. If you’re buying online, sites like RetailMeNot and Keycode can be a great source of discount codes that can save you 10-25%.

Beyond this, I use price comparison search engines to find the best deal. Even if you’re planning on buying from a local store, this information can be invaluable as it gives you ammunition for seeking a lower price from the merchant.

 

Beware of shopping base on price alone: Some people believe they are saving money by getting the cheapest item but it can backfire. There’s a difference between being frugal and being cheap. In the case of the former, you’re getting more for your money. In the case of the latter, you’re buying something that will likely wear out and need to be replaced.

 

Read reviews: Part of your research must include looking at reviews online and/or asking your friends and family for their personal experience or opinion on a particular product or model. Even if they don’t have the exact same model that you are looking for, they may still have valuable insight based on their personal experience. For instance they can tell you the features they absolutely love, features they wish they did have which another particular model may provide, or features that are simply not effective or worth the money.

Depending on what you’re looking for, Amazon.com is a great source of user reviews. Our family subscribes to Consumer Reports and therefore always check with their reviews on products.  It is our experience that they rate just about everything.

STEP #3: START SAVING FOR YOUR ITEM

Now that you know exactly what your are buying, and where you plan to buy it, its time to start saving for the purchase. I know many of you are thinking...is this guy really serious? But I’m here to tell you from experience, this step is the most important step. I say this because as you save for the purchase, it allows you to take a step back and truly discover how bad you want the item.  It essentially keeps you from making an impulse buy! 

Many times, we have discovered during the saving process that we could live without the item for a while longer and as a result we sometimes slowed down the rate in which we saved for the product.  There were a few times, we increase our savings rate as well.

 

Accumulate the cash: To save for the purchase, we find it best to automate your savings to help you accumulate what you need in a dedicated account. Keeping the money in a separate account helps protect you from the temptation to dip into your emergency fund to make the purchase, and automating the transfer guarantees that it will happen.

While this sort of thing is often easiest to set up with an online savings account, many local banks and credit unions also allow you to open additional accounts without fees. Our family currently use a Capital One 360 online account for our savings. Capital One allows us to create a sub-account and automate periodic transfers in literally minutes.

Please note that we are assuming that the item is a “want” and not a “need.”  For items that are a need, we figure that you would use cash from your emergency savings.  After all, that is what your emergency savings was intended for. 

STEP #4: GO BUY YOUR ITEM AND ENJOY!!
Now that you've saved enough money to buy your large purchase, its time to go out and buy and enjoy your item! 

OTHER TIPS TO SAVE MONEY ON YOUR LARGE PURCHASES

 

·       Consider buying used: These days, with Craigslist, Facebook, Instagram, etc.  There are plenty of ways to buy lightly used items. And if you know how to drive a hard bargain, there is definitely opportunities to haggle your want to a great deal. 

·    Consider renting: This may not be available for all products but it is worth looking into for some products.  For instance, our family once rented a camera lens from a local camera store before we decided on which one to buy.  It allowed us to test the product and helped us determine exactly which lens was best for us. 

·    Consider borrowing or trading:  Sometimes, you may be able to trade for the item you want.  For instance, my wife recently traded a mountain bike and some cash for a practically brand new beach cruiser.  It was a great beach cruiser with a various speed controls and of course a nice basket.  As with our experience, it may not always be possible to find an equal trade, but your still likely to save some money doing it.

Making a major purchase doesn’t have to be a chore. If you plan ahead and save your money, you might even have a bit of fun during the process.

 

What are your favorite tips to save money on large purchases?