There are two things we’re all about here at Our Bill Pickle: keeping it real and sharing this space with those who can provide perspective on matters outside our expertise.
Today, I’m sharing a special guest post…from my husband, Jeff.
Although Jeff does not have a blog, he does have a lot of knowledge in a unique area: procurement.
He’s been working in the industry since 2016. I’ll be honest: there are definitely elements of his work that go over my head. But there have also been times where his training has helped us a great deal. This is particularly true when it comes to making big purchases.
Today, Jeff is sharing some simple steps that will help you assess big purchases, shop confidently and get what you want.
(Interested in guest posting at Our Bill Pickle? Click here for more details!)
Big purchases: How to shop with confidence (and get what you want)
In North America, we are quite privileged to make a few big purchases in our lifetime, whether we can afford them or convince someone to loan us the money.
My idea of a “big purchase” has changed as I’ve moved from a teenager with a lot of disposable income to an adult with more financial responsibilities. These days, buying a first car or a new home comes to mind. Rightfully so – these are big purchases for most people.
Working as a procurement specialist has also changed and expanded my understanding of big purchases. Working in the industry, it’s not uncommon to see stakeholder budgets of tens of thousands become hundreds of thousands, which becomes…well, you get the picture.
But whether it’s $100 spent as a university student or a $500,000 operational budget, what makes a purchase “big” isn’t necessarily the price tag — it’s how much you are giving up to get what you want or need.
With that in mind, it’s important to recognize the way emotions can influence purchasing decisions.
THE EMOTIONAL SIDE OF BIG PURCHASES
I’ll never forget the first time Tara and I went to an open house.
We were the first to arrive on a beautiful late summer day. The sky was clear and blue with a gentle breeze. We walked up to the house and wouldn’t you know it, the doors were already open for us. The real estate agents greeted us with smiles and friendly introductions.
I had my first positive experience inside a potential “big purchase.”
As we walked through, the agents gave us time and space to experience the house and talk amongst ourselves. When examining the beautiful backyard, the agent rejoined us. He talked a bit more about the house. As we were leaving, other potential buyers were showing up to view what I saw as our perfect home.
We made our way back to our car and drove onto the highway. As soon as I was in the car, I started thinking about how quickly we could secure the financials to our new dream home before someone else took it away from us.
I was convinced there could never be another home like this one.
Of course, we didn’t end up purchasing the home (thankfully, as it had many significant structural issues). I use this story to share a real life example of how easy it can be for consumers to give up their purchasing power.
As readers of a financial blog, you likely know companies employ all kinds of strategies to improve their bottom line. Low introductory prices can entice customers to try products they may have otherwise ignored. Go to any hotel, ticket sale or even some shopping websites and you will likely be exposed to the illusion of scarcity – the alert letting you know there are “only four items left!”
The list of strategies goes on and the more you dive into it, the more a simple shopping trip turns into a battlefield.
I’m not interested in exposing you to more of these tactics, although I would encourage any consumer to learn more. My hope is to empower you with a strategy you can employ when making your own big purchases.
If you’re tired of reading and want one quick tip, let it be this: if you can clearly identify what it is you truly want or need you will have a better chance of spending your money wisely.
WHAT IS A BIG PURCHASE?
Before beginning we need to talk about what should trigger this process. Your time is your most valuable resource. As a rule of thumb, I wouldn’t recommend undertaking a process like this for everything you buy.
Defining a big purchase comes down to you and your budget.
If a purchase is more complex or requires spending significantly more than you normally would this is probably a good indicator to roll up your sleeves and do a little homework before buying.
BIG PURCHASES: FROM IDENTIFYING TO EMPOWERMENT
The first question you should ask is simple: what is it that you need?
The important word in that sentence is you. Not what the salesman or tv commercial or the website or Facebook Ad wants you to believe you need. Why do YOU want or need this product?
A good place to start is to write a short paragraph of what you are looking to achieve with your purchase. Getting these ideas out on paper will begin the process of defining your needs. This likely won’t happen all at once so give it a few minutes. Some things you may want to consider:
- Specific features/functions;
- Company reputation;
- Warranty length/type offered;
- How long you expect the product to last (and how often you’ll use it);
- Availability of replacement/repair parts; and
- Environmentally-friendly products.
Here’s an example of what identifying your purchase could look like:
This exercise should begin to bring clarity to what your true needs are.
You may find it helpful to do a little market research at this point. I promise it’s not as intimidating as it may sound and can be kind of fun! The amount of research will be dependent on what it is you’re looking to purchase. Take to the internet if you are unsure of the different features and functions available to you while keeping your needs in mind.
PUTTING IT ALL TOGETHER
What I like to do after my research is complete is combine the research with the needs I’ve identified in a table format to find products I could purchase.
I like to do this because it offers me a way to equally compare products with what’s important to me. You can use software like Microsoft Excel, but good old-fashioned pen-and-paper also work just fine.
Here is an example of what your chart might look like:
This table removes some of the outside influences while the market research expands your knowledge of what is available to you. Once you find a product that meets most of your criteria you can select the option that works best for you.
It’s only at this point that I’d recommend the actual shopping process for your big purchase.
TAKING IT ONE STEP FURTHER
Now that you’ve made it to the purchasing stages, my final piece of advice is simple: keep an eye out for sweet deals!
Are there any annual sales that you can take advantage of? Are you okay with buying used or refurbished to save money? Why not go the extra mile and see if you can keep a few more dollars in your bank account? Our Bill Pickle has tons of tips on how you can save money on purchases. For example, in this post, Tara wrote about how she bought a Macbook Air on a budget; in another post, she shared some tips on how to save money shopping for makeup.
FINAL THOUGHTS
When it comes to making big purchases, knowing what is important to you and what products meet your needs will help empower you to make the right purchases at the right time.
Too often we quickly narrow down our options based on limited information without really seeing what’s out there. When you know what matters to you, it will help you clearly understand the intention behind your spending. Knowing this before entering a store will help reduce your chances of being influenced to spend more of your money on all the extra bells and whistles.
I hope this exercise on big purchases will assist you during these challenging times by helping bring awareness to your purchasing decisions.
Photo by Tara Clark from Burst
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