Essential Questions to Ask Yourself Before a Major Purchase

10 questions to ask yourself so you can purchase with confidence  

Major purchases can be thrilling but also daunting.

In our consumer-driven world, it's incredibly easy to succumb to the allure of instant gratification. You might have your eyes on the latest smartphone, a luxurious vacation, or a shiny new car, the temptation to splurge is ever-present. However, before you succumb to the siren song of instant gratification, it's crucial to take a step back and critically evaluate the potential purchase.

Impulsive spending can quickly derail even the most well-intentioned financial plans. It can lead to a cycle of debt, stress, and ultimately, feelings of regret. By taking the time to carefully consider your options and ask yourself the right questions, you can make informed decisions that align with your financial goals and enhance your overall well-being.

Thoughtful preparation ensures you make decisions that support your financial health and personal happiness.

Let’s dive into the questions that should guide every significant spending decision.

1. Does This Purchase Align with My Aspirations?

Every major purchase should serve a purpose in your broader financial picture.

• Could you be prioritising short-term enjoyment over long-term financial freedom?
• What are your short-, mid-, and long-term life aspirations? Are you saving for a down payment on a house, buying a business, planning for retirement, funding your children's education, or hoping to travel the world?  If a significant purchase detracts from these goals, it may be worth postponing or rethinking. For example, splurging on the latest smartphone every year could set back your plans to invest in a property or pay off debt.

Your financial future depends on balancing present desires with tomorrow’s aspirations. Think of this decision as a piece in your overall wealth-building puzzle.

Honest self-assessment and reflection at this stage can prevent you from making impulsive decisions that may have long-term negative consequences.

To help answer this question you might try support with:

1. A discussion with a trusted friend, mentor, or family member.
2. Meditation or prayer related to the decision.
3. A financial adviser, including the team here at Become Wealth!

2. Can I Afford It Without Stressing My Budget?

The first and most critical question is whether you can truly afford the item in question. Your budget is your financial heartbeat, and major purchases should fit into it without causing strain.

Start by assessing your fixed and variable expenses. Are all your monthly obligations — housing, utilities, groceries, insurance, and so on — covered comfortably? Then, factor in potential hidden costs. For instance, buying a car includes insurance, fuel, and maintenance. For electronics, add warranties and accessories.

If financing is involved, examine the total cost, including interest. A seemingly manageable monthly payment can snowball into a hefty commitment. Always leave room for savings and emergencies; the peace of mind is worth more than any new gadget or luxury item.

3. Is This the Best Timing for the Purchase?

Timing is everything, especially when it comes to big expenses. Is now the right moment, or could waiting benefit you?

Seasonality often impacts pricing. Major holidays or end-of-season sales might offer better deals on everything from electronics to appliances. For larger investments like homes or cars, market conditions play a role. Interest rates, inventory availability, and economic trends can influence affordability.

It should go without saying, but any big purchase is best made when you’re on a sound financial footing. If you’re not, your first priority is obtaining financial stability.

Instead of making impulsive decisions, give yourself time to reflect on the purchase. Wait a week or two before making a final decision. This allows you to cool down and assess the purchase more objectively.

4. Why Do I Want This? Needs Versus Wants

One of the most crucial distinctions to make before any major purchase is between needs and wants.

• Needs are essential for survival and well-being. They include necessities such as food, shelter, clothing, healthcare, transportation, and most utilities.
• Wants are desires that enhance your quality of life but are not strictly necessary for survival. They can include entertainment (luxury holidays, concerts, gaming consoles), luxury goods (designer clothing or accessories, jewellery, high-end electronics), and personal indulgences (fine dining, spa treatments, hobbies).

While indulging in wants can bring joy and satisfaction, it's important to prioritise needs first. Ensure you have a solid financial foundation in place before allocating significant resources towards discretionary spending. This involves:

• Pay yourself first: Track your income and expenses to understand where your money is going.
• Build an emergency fund: Aim to save 3-6 months of living expenses in an easily accessible account to cover unexpected costs.
• Paying off high-interest debt: Prioritise paying off credit cards and other high-interest loans to reduce your overall debt burden.

Once you have a solid financial foundation, you can gradually increase your discretionary spending while still maintaining financial stability.

Motivations Matter

Social pressures, advertising, and social media often push us toward purchases we don’t truly need. Before committing it might help to ask yourself seriously:

• Are you buying this because it will improve your quality of life, or because everyone else has or wants it?
• Does this item fulfil a genuine need or long-standing desire, or is it a fleeting want?

Being honest about your motivations can prevent impulsive decisions you may later regret.

Remember, self-discipline is a cornerstone of financial wellness. A moment of reflection now can save months — or years — of financial headaches.

5. How Will This Purchase Serve Me in the Future?

A great way to evaluate the value of a major purchase is to project its utility and satisfaction over time. Will it make your life easier, more enjoyable, or more productive?

For example, investing in high-quality kitchen appliances may save you time and improve your cooking experience for years to come. On the other hand, splurging on a trendy outfit might only offer short-lived satisfaction.

Think long-term. A well-considered purchase should enhance your lifestyle and remain relevant long after the excitement of owning it has faded.

6. At What Cost?

“‘At what cost?’ is a question that cuts through the noise and gets to the heart of the matter. Your decision to buy something pricey is not just about the money; it's about everything else — what you're giving up, what you're getting, what you're risking, how you're feeling and who you are.

Every dollar you spend represents an opportunity cost. When you allocate funds to one thing, you forgo the chance to spend or invest that money elsewhere.

If you spend $5,000 on a holiday you might be delaying a home improvement project or losing out on potential investment growth. Before finalising your decision, weigh the trade-offs. Could this money create greater value elsewhere?

Asking “at what cost?” is a way to be honest and accountable to yourself and your values while resisting the seductive nature of consumer culture.

Financial literacy is about understanding that resources are finite. Evaluating opportunity costs ensures you make decisions that reflect your priorities and values.

7. Have I Done Enough Research?‍

Impulse buys can be costly mistakes. Doing your homework before making a significant purchase can save you money and regret.

Start by comparing prices from multiple retailers or vendors. Read reviews and look for credible feedback from other buyers. For larger investments like homes or cars, enlist professional help to ensure you’re getting value for your money.

Research also includes understanding warranties, return policies, and ongoing costs. The more informed you are, the less likely you’ll be to encounter unpleasant surprises later.

8. How Will This Impact My Lifestyle?

Beyond finances, think about how this purchase fits into your day-to-day life. Will it simplify tasks, add convenience, or bring you joy? Or will it create unnecessary stress?

For example, buying a bigger home might sound appealing, but it could mean higher utility bills, maintenance costs, a need for more furniture, more time spent cleaning, and more time spent mowing lawns or doing gardening. Similarly, a flashy car might turn heads but could also strain your finances and limit your ability to enjoy other pursuits.

A well-thought-out purchase should align with your lifestyle and enhance it — not complicate it.

9. Have I Explored Alternatives?

Before you commit to a major purchase, explore other options. Could you rent, borrow, buy second-hand, or sign up for a subscription service that offers access to the desired product or service without the need for outright ownership. Here are a few examples:

• You could join a local gym, utilising free community resources, or workout in a park with friends instead of buying expensive home gym equipment.
• If you need a hole drilled for a one-time job or project, just ask to borrow a friend or neighbours drill rather than buy one for yourself.
• Consider high quality second-hand furniture rather than high-end new pieces. It’ll be a fraction of the price.
• Set aside regular sums for AirBnB, hotels and motels, or motorhome rental as an alternative to buying a motorhome or bach. Baches and motorhomes often come with pricey maintenance costs and may limit your holiday choices.  

Thinking creatively about alternatives can better meet your needs while saving you money. Often, the best solution isn’t the most obvious or expensive one.

10. How Can I Afford This?

This is where creativity and resourcefulness come into play.

Instead of focusing on limitations and scarcity, cultivate an abundance mindset. Believe that there are always multiple ways to achieve your financial goals. This mindset fosters creativity and encourages you to explore new opportunities. Here are some practical ways this might apply:

Increase Your Income

Thinking abundantly, your earning potential is infinite.

• Double down on your primary method of earning: Explore opportunities for advancement within your current role. This is usually the best way to bolster your income, and therefore what you can afford to purchase. Could you negotiate a raise? Are there opportunities for professional development that could lead to increased earning potential? Is there a bonus or commission structure you can strive for? Can you work toward a promotion?
• Develop a side hustle: Consider starting a side hustle to generate extra income. This could involve freelancing, starting a small business, driving for a rideshare service, dog-walking, baby-sitting, or any number of other income-generating opportunities.
• Invest in your skills: Invest in your education and professional development to increase your earning potential. This could involve taking online courses, attending workshops, or pursuing certifications. If your primary means of earning income is subpar, then it might be time to retrain in a whole new field.

Learn more:

• ‍High income skills you can learn without a degree‍
• ‍How to make six figures‍
• ‍NZ’s best side hustle ideas

Reduce Expenses

Nearly all of us can cut back somewhere. Of course, you can only cut your expenses so far, so a better way to afford more is think then act abundantly as you strive to earn more!

• Identify and eliminate unnecessary expenses: Analyse your spending habits and identify areas where you can cut back. This could involve reducing entertainment expenses, dining out less frequently, or finding cheaper alternatives for everyday items.
• Negotiate lower bills: Negotiate lower rates for your internet, phone, and insurance.
• Explore cost-saving practicalities: Consider options like meal prepping, buying in bulk, and the use of public transport.

By exploring these options and cultivating an abundance mindset, you can increase your earning potential and create a sense of financial freedom. Then you can make the purchases which truly matter to you.

Conclusion: Purchase with Purpose, Live with Confidence

Every major purchase reflects your values, priorities, and financial habits. When you pause to ask the right questions, you empower yourself to make decisions that support not only your immediate needs but also your long-term aspirations.

So, the next time temptation strikes, take a step back. Weigh the pros, cons, and costs — both financial and emotional. Smart spending isn’t just about dollars and cents; it’s about creating a life you’re proud to live.

Because in the end, it’s not about owning more — it’s about owning the right things, at the right time, for the right reasons. Now that’s a purchase worth making.