Think Before You Buy: Why Waiting Periods Make Sense

Deciding what when where and how to spend your hard earned money is not an easy decision for most average Americans, especially if you are looking at large ticket items.  The definition of a large purchase is different for everyone.  If you are a millionaire, which most of us are not, spending $5,000 on a weekend getaway may be a drop in the bucket, but for most Americans it is a significant amount of money is not parted with without first thinking it through very carefully.

The Waiting Period
There is usually a waiting period for most things that require a large deal of responsibility or money. Being approved for loans, being granted a mortgage, getting offered a job purchasing a house or buying a handgun all require a waiting period before the final decision.  These are just a few of the common examples that have a built in waiting period to avoid the mistakes that may come along with impulse decisions.

The waiting period exists because making an important decision is a complex process. The mandatory waiting process gives all parties involved the time to really think about what they are doing and the opportunity to back out if necessary, without penalty. Once you sign on that dotted line you better hope you did your homework because usually a signed contract is binding. The large the purchase the harder it is to get out of it.

Beware of the Impulse Purchase
Impulse buying is never the way to go when it comes to large ticket items such as cars, homes or even large appliances. The amount of money you have at your disposal will really define the amount of time you should take to decide if a large purchase is the best choice for you at this time. Those that have a lot of money do have the luxury of spending it at their disposal. For those who don’t, taking a few days to think about making a good decision is the best advice before diving in to anything.  A few days of waiting are a small price to pay for something that will have a long term impact on our financial future. 

Before Deciding to Spend on a Large Purchase

• Determine if the purchase is a necessity or a luxury purchase.  
• Create a budget and determine if you can afford the purchase. 
• Will spending the money cause you financial hardship and if so are you and/or your family prepared to sacrifice other things.
• Make a list of the pros and cons of your purchase.
• Is there a way you can save on the original cost of the purchase by a payment plan, lower cost item or saving for a later date?

Thinking about a purchase before you do it and really doing your homework in terms of affordability before jumping in to a major expense is always the responsible thing to do.  Take a few days to answer a few questions honestly about what you can afford or what you are willing to give up is the best way to decide if making a large investment is in your best interested at this time. The waiting period can be considered the equivalent of an insurance policy for large ticket purchases.