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SchoolsFirst FCU offers simple tips to plan a large purchase without ruining the budget
Many consumers postponed making big purchases during the pandemic and have continued to remain cautious amid concerns of inflation and rising interest rates. Yet this year some say they’re now ready to reconsider purchasing large-ticket items such as electronics, home appliances and family vacations.
According to a recent Household Spending Survey issued by the Federal Reserve Bank of New York, the likelihood of consumers making a large purchase over the next four months has increased for some product categories, including home appliances and electronics. Additional research from Vericast suggests that while consumers are adjusting their lifestyles and spending overall, 35% plan to take a vacation and 24% plan to purchase new technology in 2023.
Financial experts at SchoolsFirst Federal Credit Union, the largest credit union in California and fifth largest in the United States, recommend that potential buyers look beyond the price tag when making a large purchase. Consumers should first take into account their overall priorities and spending needs, and then decide how to finance or pay for the purchase.
“It’s important to make a budget and stick to it,” said Jane Eichenbaum, senior vice president of Member Contact Centers for SchoolsFirst FCU. “Consumers need to consider the overall price of the purchase, including any accessories, extras or additional expenses down the road.”
Eichenbaum suggests a simple method, based on the acronym A-B-C, to create a budget and ensure that the purchase works within your means:
Analyze your situation. Consider what you need to buy and why you need it. Is it absolutely necessary, or is it an impulse purchase? It’s also important to think about when you need the item – the longer the time frame, the more time you’ll have to consider financing options and methods of payment. And when selecting a product, it may be wise to consider…
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