Last Updated on Dec 23, 2019 by James W
Do you ever dream of driving a luxury Lamborghini to your workplace while all your colleagues would practically gawk at you? Or do you ever wish to buy and flaunt that sparkling necklace shining through the jewelry store?
Whatever it is, most of us have dreams larger than life. To achieve them is seemingly impossible. After all, no one is stupid enough to exchange their kidney for an iPhone, right? Yet, the financial barrier doesn’t abandon us from dreaming. We keep hoping for a miracle.
Let us tell you, plain and simple: miracles do not happen unless you try. Once in a while, you can make a luxury purchase if you know how to play your cards right. It doesn’t involve taking heavy debts that will take a lifetime to pay off. Instead, you need to learn how to finance responsibly.
So whether you have your eyes on an apartment or a luxury vehicle, the key is to plan at prior. According to CAGR 2019-2023, revenue in the Luxury Goods market amounts to US$ 318,797m in 2019. The market will probably grow annually by 3.0%. And as the market grows, the number of available financing options also increases.
Following are some of the financing opportunities that will help you give shape to your far-fetched goals:
- Look around for Interest Rates
Financing as little as you can is the golden rule of staying out of debt. Cash payments are always the best, but some situations rule it out. In that case, you have to make your payment through a line of credit or a loan. Be careful when pulling out the plastic. If you know you can’t pay your statement balance fully, do not make the purchase.
Despite the downsides of paying through credit cards, we cannot ignore the fact that it is one of the best means to pay for a big shot item. “Digital payment methods offer the most convenience, and with POS financing, it can be as easy to buy a bulldozer as it is to buy a book,” says Joshua Reason from Currency.
Also, check out the current interest rates to find the lowest APR. Keep in mind, as the interest rate goes higher, it makes your purchase more expensive over time. You can acquire a low APR with a strong history of credit. If that’s not the case, work on improving your credit score before opting for a large purchase. Every point counts. Make it a practice to pay your credit card payments fully and in time.
- Apply for Loans
When you opt for large loans, you must adhere to the rule of keeping the credit score intact. One of the safety measures when shopping around for loans is to pull your credit report with a soft inquiry. Potential lenders will try to pull this report through a hard inquiry. This leaves a bad impact on your overall credit score. A soft inquiry makes sure that your credit score stays up.
Soft inquiry involves your lenders evaluating your credit to examine your account. This will not create an impact on your credit scores. Moreover, loan applications of the same category and same amount stand as a single inquiry within a limited period.
Another option you can go for is seller financing or lending. Every year, millions of Americans seek the assistance of private sellers to buy their next vehicle. It only applies in case of some big-ticket items like a car, business, or an apartment. The seller will loan you money that you can pay back after some time.
At times, your past financial missteps may become a hindrance when applying for home loans. But instead of bailing out of the mission, you should continue. There are a few things you can do to keep the purchase process a pleasant one. Look for ways to boost your credit scores. Getting home loans for bad credit first time buyers might seem a tough task, but rest assured that there are plenty of methods to get out of the ordeal.
- Make a habit of saving
Having your own money gives you the confidence that never comes with borrowed money. Start with small amounts of money. Initially, you may feel like those are the baby steps, but the amount you have at hand by the end of the year will take you by surprise.
The mindset of saving money is quite rare nowadays. According to Bankrate’s March 2019 Financial Security Index survey, more than 1 in 5 working Americans aren’t saving any money for retirement, emergencies, tragedies or other financial goals.
This mindset needs to change. Start a habit of saving money right away. If your finances hamper you from doing that, check out the financial tips for broke people.
One way of saving is to pay yourself first. Set up an immediate transfer from your checking account to the savings account on the day when you receive your pay. This way, you won’t feel the temptation to spend all of your payment.
- Invest Some of Your Money
If you have a goal for your future and you have time like three years, you can consider investing it in a mutual fund. This will have a higher return rate than the usual savings account. Or you can go for a high-yielding savings account. But the drawback that tags along with it is the fluctuating rate. The rate of interest may go down without any prior warning.
Investing or saving money is quite a challenge. When you know, there is money in your account, and you can’t refrain yourself from spending it immediately, there are apps in the market that will make things easier for you. These apps help you get a quick rundown on how you can save money on a couple of recent purchases. It amazes you how you can squeeze out a few cents here and there.
Wrapping up
So it’s perfectly acceptable to feel excited about your next big purchase. Make sure you take each step with precision and care. Set a budget, clear up your credit score, and do a thorough research of the market.
Is there any other way that helped you save big money? Share your experiences with us. We would love to know.
