The amount of time you spend researching a purchase should be directly proportional to the price of the item. In other words, as the cost of an item goes up, you should spend more time researching the purchase.
If a book costs $20 and a smartphone costs $300, which purchase should you spend more time researching? The phone, duh. An hour spent finding the best deal on the book might save you $3 when that same hour could save you $50 on the phone.
Too often we get it the other way around. We spend hours comparing cheap everyday items between Walmart, Costco, etc. and then buy a new car the next weekend after visiting two dealerships. We focus on the chump change when, in reality, it’s all about the Benjamins.
Let’s look at some examples of what to do and not to do when buying big ticket items.
Buying a Car
Do not get the new car bug on a whim and decide you absolutely need one this weekend. Do not show the salesman how emotionally attached you are to the car. Don’t even become emotionally attached to the car. These things make a recipe for an uninformed, overpriced purchase.
Do lots of research online, comparing models, prices, etc. Cargurus.com is one of my favorite sites for this. Arm yourself for the negotiation by learning the salesman’s techniques. Carbuyingtips.com has a great section on this. This is likely the second biggest purchase of your life, so spend time on it!
Buying a House
Do not use your cousin Vito who sells real estate on the weekends as your realtor. Do not make the decision to buy after one weekend of looking at houses.
Do find a realtor who eats, drinks, and sleeps real estate. You want real estate pumping through your agent’s blood. You want an expert. Do spend lots of time online looking at neighborhoods where you want to live. This is probably the single biggest purchase of your life, so spend lots of time researching it!
Cool It, Cry Baby
Patience is the name of the game. Keep a cool head, don’t become emotionally attached (or at least don’t show it), and work through the fatigue of the research process. A few minutes more of work could save you hundreds!