Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
If you have a major purchase on the horizon — be it electronics, home furnishings, or a vehicle — now is the time to start considering your options to keep costs low and value high.
- Know the best time to buy. July is when prices on home wares and furniture reach their annual lowest, as stores mark down goods to attract wedding gift-givers. Shop for a new car at the end of the model year for the best discounts — or at the end of the month, when salespeople are most motivated to make their quotas. A little research can mean big savings.
- Mull it over. Take your time before you spend big to avoid buyer’s remorse. If your garage already looks like an REI, maybe you don’t need that paddleboard as much as you think you do.
- Comparison shop to save on taxes. It was news to us that Amazon stocks the full range of laptops and other consumer electronics by all the major brands, from HP to Apple. That could mean more than $100 in savings if you buy online versus going to the mall, where you’d have to pay state sales taxes.
- Put it on a rewards credit card (with caveats). Getting 1 or 2 percent cash back on a major purchase seems like a no-brainer — unless you’re expecting to carry a balance. Then the interest rate will exceed any rewards you’ve received. In that case, consider paying with cash or negotiating zero percent financing at the store you’re buying from.
- Determine the value of a warranty. Back to cars again: The conventional wisdom says “always buy used,” because of the steep depreciation value on new cars. But when you buy a new automobile, you benefit from the full warranty — something you may pay a few extra thousand for when considering a certified used vehicle. Crunch your own numbers to see what it’s worth to you.
One Comment
#3 is technically a fallacy. In most states you are liable for what’s called a “use tax” on those goods purchased out of but consumed in a state. Usually, it’s equivalent to the sales tax that’s levied where you live.
I also have to point out that if you purchase online to dodge your local sales taxes you have NO business complaining when your municipality has to cut services and police officers.
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[...] And while its intent is humor, the advice is sound. For (more practical) tips on saving up for a major expense, check out our Top 5 list on planning for a big purchase. [...]