Making a wrong financial decision can affect your personal finance and this is why it is important for you to question yourself before making big purchases.
Making a large purchase is a financial decision everyone will have to take at one point in their lives and doing this requires some degrees of financial literacy.
A large purchase here is relative because what constitutes a large purchase vary from person to person, but for the purpose of this article, let's peg the price of a big purchase at N100,000 upward.
So, before you spend N100,000 or more on an item, you need to sit back and ask yourself these questions.
1. Do you have the cash to pay for this item?
If you buy the item without touching your savings, you can buy it. But if buying it will adversely affect your monthly budget and emergency saving, it is advisable you don't consider it.
Instead of depleting your savings, you can wait till you have enough cash to buy the item.
2. Do you really need this item?
This question helps you to determine if the item is a need or a want. Is the item necessary to have or it's just nice to have it? If you can answer this, you can then make a decision about the item.
Moreover, if the item is a true need, you've got to know why and when you need it. But if it is a luxury purchase, you should be sure that you can afford it and have the cash to pay.
3. If you do need the item, do you need it right now?
If you genuinely need the item but do not have the cash to buy it at that time, you may need to delay your gratification and find a way to do without the item.
For instance, you need a laptop but you don't have the money to buy it now. So, instead of borrowing money to buy one, you may need to consider using your phone for some tasks if your smartphone can do it till you have the cash to get a laptop.
4. Can you find a used one that will work?
Buying used items is one of the best ways to save money. You can buy a fairly used laptop less than half the cost of a new one. You can get some used devices at a very low cost and still get a good quality.
So, if you don't have the cash for that item you want to buy, you can consider buying a used one that still works very well.
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5. Have you done your research?
Before you spend so much money on an item, you need to do a thorough research about it. Get to know what people are saying about the product, read reviews and issues about the product. Just make a lot of findings about the item as this will help you determine if the product is what spending your hard earned money on.