What does it take to decide on a big purchase?

A financial journey typically includes several twists and turns – such as understanding how to manage spending, build savings, and control debt. There might be “speed bumps” in the form of unexpected changes in income. Along the way, you might also navigate milestone purchases such as financing a home or car.

When considering a significant purchase, the destination is within reach when you steer through the following five financial steps. These guidelines set you up to understand how a big purchase fits into your overall financial picture.

4. Plan your purchase

Timing is everything, and having a plan in place for when to pull the trigger can make all the difference. Do you have enough in savings to provide a good down payment on a home or car? Is there a certain time of year that special financing or promotions are generally available? Three-day holiday weekends are notorious for sales and inventory purges.

Now’s also a good time to find someone you trust to help you carry out your big purchase – if you’re buying a home, ask friends or families for a real estate agent they can refer.

Having someone in your corner, like one of our reliable real estate lending officers, can also help you to understand your options and know warning signs to look out for can make all the difference.

For a car purchase, do you feel the dealership is able to provide advice and guidance? It's not always likely. Have you taken the time to research vehicle make and model from a reputable source of information? This is also the time to get your documentation in order, like proof of employment, insurance or other financial information.

5. Make the deposit

Finally, get ready to make an earnest money deposit for your purchase. In the case of a home purchase, which indicates you are a serious buyer. Generally, earnest money deposits range from 1% to 2% of a home’s purchase price and are only refundable under specific circumstances.

For a new car purchase, a deposit may be asked for from the dealer, but don't pay anything until you agree to the vehicle price in writing, and are sure you are buying the car. Avoid a deposit, by going into the dealership with financing in hand.

Tip: Make sure you understand whether the deposit is refundable before making a purchase - especially if you think you may change your mind later.

The Journey Ahead

While not an exhaustive list, these steps should help prepare for the financial road ahead. As you travel along your financial journey, you can also always take advantage of financial counseling and guidance provided by our trusted partner, GreenPath Financial Wellness.