When managing our finances, the impact of large spending items can be significant. If they are planned, well thought out, and connected to our goals and purpose, large spending items can positively impact your lifestyle and wellbeing. If they are not, they can turn into a driver of financial stress.

Depending on how they have been funded, large spending items can come with a loan that might long outlast the benefit of the purchase. Of course, there are also the unplanned large expenses that we need to contend with that bring extra stress and pressure. Examples could be connected to personal health events or repairs to an asset that we might own.

Many people focus on changes in behaviour and approach smaller purchases but don’t put enough time into larger commitments. Examples of what might fall into large spending could be the new car, boat, caravan, kitchen, accommodation or housing, investment or even a big holiday.

Sometimes it is possible to get caught up in the emotions of the purchase and add on the extra bells and whistles. Whilst this might be appealing at purchase time, it can often lead to buyers’ remorse when the shine starts to wear off.

The way we manage our money can have a direct impact on our happiness. It is much more than getting a hit of happiness in the initial joy of the moment.

I recently was discussing this issue with one of our specialist advisers, Angela Boot, who is based on the Sunshine Coast. Angela highlighted some of the questions she asks when people are considering large purchases.

The core of the questioning was around the following areas:  

• Have you thought this through? 

• How will you fund this – with your own funds or other people's funds?  

• What impact will this have on your lifestyle now and in the future?  

• If your circumstances change, what will be your ability to sell it and receive value?  

• Are there alternative ways to achieve the same thing without purchasing it?  

These are great questions to consider in preparation for a purchase.  

1. Consider how important this is to you. 
2. Take time, do your research, and always ask for a better deal.  
3. Use time as your friend – if you find something that fits, give yourself 48 hours to reflect. 
4. Consider how this purchase will make you feel now and in 12 months.  
5. Try before you buy - what are the options? 
6. Consider buying second-hand where you do not pay the premium for brand new.  
7. Consider leasing for a short period again to make sure it is something that will be used.  
8. Ideally, save for it or use your own funds and avoid getting credit  
9. If you need to borrow, have a plan, know the costs, and do your research. 
10. Understand the impact your purchase has on your financial goals and your need to keep working.  

In an environment with rising interest rates, higher costs of living and increased uncertainty, it is important to consider your options before making a large purchase. Of course, we live in a world where sometimes we are making the purchase for someone else’s benefit, perhaps a relative. Similar questions should be applied. 

Make sure you make an informed purchase that you can live with and that will bring you happiness over the longer term. For some who have accumulated wealth, it is about having the confidence to spend some capital on those items that are important to them. 

As we go through life, it is nice to spoil ourselves and reap the benefits of our hard work. However, the value of social connections, friendships and having a sense of purpose sometimes brings more value than materialistic things. This is another thing to consider when making these purchases. Is the purchase desire coming from a void that could be filled in other ways? If we can achieve a balance through our purchasing habits, we are more likely to be satisfied in the long term.