How to Prepare for Your First Big Purchase

Categories: Budgeting, Financial Planning, General Tips

There’s nothing like the feeling of excitement and independence as you drive off the lot in your own first car, walk onto campus on your first day of college, or turn the keys to enter your first home. Of course, the big “firsts” in life can come with some apprehension, too, but with the right plan in place, the money can be the least of your worries. Follow these tips to help your first (or next) big purchase be a cause for celebration, not concern. 

Plan ahead

Some big purchases can take years to plan and save for, so be prepared for when you’re ready to buy. Let’s look at college or a post-secondary training program. If you know you’ll graduate from high school at age 18, start talking about your plans with family and trusted adults or friends at least a year or two in advance. Put in some research time to see what programs might interest you, the yearly cost, and the expected amount of time to complete the education or training. Then plan your financial strategy by learning about potential loans, grants, scholarships, how much you or your family members are able to contribute, and what may still be needed to help the plan become successful.  

Save money

Set aside a portion of each paycheck, and look at timing again to figure out how long it will take you to save for the purchase you originally planned for. A down payment on a first house or security deposit and first month rent on your first apartment are two perfect examples of save-worthy purchases. Housing will also typically require monthly payments like mortgage or rent, so planning and saving for those items in addition to your weekly or monthly income is important, too. Starting and setting up automatic deposits to a savings account is a great way to ensure your money is secure, and potentially even growing with interest.

Try to negotiate the price

For some big purchases, you may have the option of negotiating on price. Often things like electronics are set in stone, but there is a good chance of negotiating on big-ticket items like cars, houses, local appliance purchases and sometimes even jewelry. The worst that can happen if you try to negotiate is that the other side says no; the best is that you get a better deal and you’re able to keep more of your own money. When negotiating, be sure to treat the situation like a business transaction and keep emotions low.

Research price comparisons

Do your homework on price comparisons to figure out the value of what you’re buying. Work toward a fair, realistic (and hopefully lower!) price that you will feel comfortable paying. 

What is your next big purchase? What is your plan to make it happen? Talk through your options with a Summit Virtual Branch representative to learn more about accounts, loans, and other financial options that can help you reach your goals faster.