Tips to Save on Big Purchases

Deciding to make a purchase, such as a house or a car is a huge commitment. It means being making monthly payments over several months or years if you take out a loan or mortgage to make the purchase. Very few people can afford to make large purchases without going into debt to do so.

However, these are not the only big purchases you'll be making. It might be a designer handbag or a diamond ring you wish to buy.

No matter how big the transaction, it's essential that you do what you can to save on the purchase. Here's how to do it:

Save, save, save 

Wherever you can, save up to make purchases. This approach might not be realistic when it comes to a home or a car. However, it is the best way to go about making smaller purchases such as furniture or appliances.

Most retailers offer a cash discount that few buyers take advantage of. In their rush to buy what they want, they don't consider that by saving they could pay less. Being a smart shopper matter a lot.

What you should do:

Open a savings account separate from your day-to-day bank account. Decide on a fixed figure that is the minimum you will deposit into it each month. Don't stick to the minimum. If you have additional money, put it into your savings account. See what account options you have. Some accounts offer higher interest rates, although you may not have instant access to your money.

Wait for a sale 

The temptation to buy something right away means that you pay full price for it. Waiting until the product goes on sale for a reduced price can help you save on the purchase.

At the end of the season or when a product is being replaced, suppliers have to move excess stock to make way for new items. Dealerships have frequent car clearance sales where you can pick up a good deal.

What you should do: 

If you're prepared to wait for a sale, make sure you're not late for the party. Keep your ear to the ground on social media so that you know about sales ahead of time. Forewarning will allow you to get there early and secure your purchase.

Pay off your debts

The interest charged on loans is calculated over the full term of the loan. For the first while, all you're doing is paying off the interest. Only after that do you start paying off the principal. If you can pay off a loan more quickly, you'll save on the interest.

What you should do: 

Pay the regular installment on time. After that, see if you have any extra money to put toward the payment. No matter how small, each additional payment makes a difference.

Investigate your options 

When it comes to financing your purchases, you have different options. Loans have different terms and conditions attached to them. They also come with varying rates of interest

What you should do:

Work out what the total purchase will cost, including any interest and transaction fees. You might find that taking out a six-month loan will cost you less than using a credit card. Always make sure you can afford the installment before making your final decision.

Think big, think more 

When it comes to items like cell phones, some stores run a two-for-one special. You probably don't need two cell phones, but you might have a friend or family member who wants one.

What you should do: 

If you see a two-for-one special that will save you money, see if you can find someone who wants to go in on it with you.

This item was posted by a community contributor.

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