In a fragile and ever changing financial climate, it is becoming even more difficult to make major purchases that you are not able to buy with what is left-over from your salary each month. Banks are cutting back on giving loans to all customers, not just those with bad credit, and a non-essential purchase will be given far less critical status than those applying for mortgages.
However, there are other ways in which to make a large purchase such as a television, car or household appliance, without having to go to the bank at all, and with the right forward planning it is easy to make the right decisions when it comes to planning for and making your purchase.
First off – The fundamentals
First of all, it is important for you to decide on how much it is that you want to spend. Obviously you will be looking into using savings or some kind of credit to buy the item, so remember to work in the possibility of your circumstances changing, to ensure that you will always be able to make repayments, or will be able to afford the loss of savings over an extended period of time. If we take buying a television as an example, work out what are your essentials in the television you are going to buy, and what can be negotiated. You may want a flat screen, but moving down a size will cut the cost drastically. Do you need an inbuilt DVD player, or can you use the one you already have to the same effect, in order to keep the price down?
Saving in advance of making a major purchase is always to safest way to go about it, because you are spending your own money and will not have to make repayments to a third party, just taking out what you can afford from your salary each month to go back into your savings account to top it back up.
To amplify your savings in a short amount of time, it may be worth drawing up a budget for a short amount of time, say three months, and living as cheaply as possible in order to put a substantial amount into your savings account each month. Living on a smallest possible amount of money can be a challenge, but when you are saving for something which will ultimately last for a far longer time than the period during which you had to live on a budget, the pros far outweigh the cons!
Compare and save
Take a look at comparison websites to find the item you are looking to buy for the very cheapest price possible without having to compromise on quality. Comparison websites list trusted sellers and show ratings for products so that you can make sure you are making the right decision before committing to buy.
It is also worth looking for items second hand, and high street stores such as Cex and Cash Converters can stock high quality goods for a fraction of the original price, meaning you get the exact item you wanted without having to worry too much about the cost. Ebay and Gumtree.com are also great ways of picking up a bargain, just make sure to check the seller’s credentials to ensure you are going to get good quality products.
When it comes time to make your purchase, if you have decided against using your savings and want to buy the product straight away and then pay it back in instalments, a low interest credit card might be a good idea. Credit cards allow you to spend more than you could afford with your pay cheque, and then pay it back over a period of time. As long as you pay over the minimum amount you can basically choose how long it takes you to pay back.
If you are looking for a faster payment plan and already have some of the money towards the item, a cash advance might fill the gap, allowing you to make the purchase and pay back the loan with your next pay cheque. You should always ensure that you will be able to pay in back in full come your next pay day, and with this being the case this can be a good way to make the purchase immediately (especially if buying a household item that is needed day to day) and pay back the costs once you have a bit more expendable cash.