At the turn of the new year, brands have begun to unveil their latest and greatest products. 2020 marks the dawn of a new decade and innovation already promises to shake up every industry. We’ve seen the iPhone 11 hit the shelves, complete with three cameras that snap crystal clear images; we can control our entire homes with a touch of a button or voice command thanks to the Internet of Things; and vehicles make lives safer by protecting drivers out on the road with automatic collision detection.
There are endless objects consumers are eager to get their hands on—from a self-dispensing kitchen sink to advanced VR gaming consoles—but before making any big purchases, it’s critical to complete a few steps first. If you’re eager to test out the new tech on the scene, be careful not to get ahead of yourself by splurging on an impulse buy. Here are some steps you should consider before swiping the plastic card.
- Consult Your Bank Account
This one probably sounds like a no-brainer, but we list it as number one because too many shoppers, eager to keep up with the Joneses, fail to take this step seriously. You may think you’re in the green with plenty of room to comfortably afford a $500+ buy, but without carefully combing through your bank statements, you might find your purchase put you in a hole for the remainder of the year.
Look at your budget and ensure that your big purchase won’t run you dry. Planning a home renovation? Account for all the things that can possibly go wrong along the way. Maybe you’ve seen a neighbor’s setup whose coffee maker automatically turns on when their morning shower begins to run; while their tech may seem impressively streamlined, there are details about renovating your kitchen that nobody tells you—like the need for an alternative way to provide meals or the cost of an unexpected plumbing issue.
Account for all these variables and add-on expenses when determining affordability.
- Plan Your Financing
Depending on the item you’re interested in buying, you might not be able to cover an all-cash purchase. Many people turn to forms of financing, such as a car loan, to pay off the price tag—but you need to do so responsibly. For example, if you want to charge the new year in a new set of wheels, find a car dealership that offers competitive finance plans before pulling the trigger. There may be trade-in deals or leasing specials that can help you save a significant amount of money.
Compare your various options and, ultimately, be realistic about what size monthly payment you’ll be able to fit within your budget.
- Improve Your Credit
If you’re one of many consumers that will pursue financing for a big-ticket purchase, it’s smart to take the time to improve your credit before applying. A strong credit score will earn you the lowest interest rates, resulting in more money saved over time.
Run a credit report and analyze what you have on file. If your score is weak, here are some tips on how you can improve it:
- Dispute any inaccurate mark in your credit history
- Manage your debt and pay off whatever possible
- Make payments more affordable by refinancing loans
- Use a credit card responsibly to demonstrate credit management
- Boost your score with positive payment history
- Lower Your Price
If you’re shopping with enough money saved up to purchase your product outright in cash, do it—so long as you still have enough set aside for rainy day funds. It’s best to avoid debt how and whenever possible, but just because you can drop down hundreds or thousands of dollars at the point of sale doesn’t mean you have to accept the full hit.
Cash is king, so use it to your power by negotiating a lower price. If you can’t negotiate the sticker price of an item, try to postpone your transaction until a holiday around which time a seasonal sale or promotion will likely go into effect.
- Protect Your Purchase
Finally, once you’re ready to make a big purchase, research how to protect it. That can be in the form of insurance, should any accident happen to your new cell phone, or extended warranty on a car or laptop. Take care of your item with routine maintenance so that it retains its value as much as possible.
With these five tips in mind, you’ll be on your way to new suite of tech in no time.