Big-Ticket Items: What Should You Consider?

Last Updated on: September 20, 2023

TL;DR – Before buying big-ticket items, particularly a house or car, you must consider the reason behind the purchase, the lifestyle changes it will affect, how you will finance it, and the best time to buy.


As you finally enter adulthood, you will find yourself wanting to buy big-ticket items for yourself and your family, especially once you see your peers doing the same.

However, many reasons behind a purchase need careful consideration before plunging in so you can avoid the pitfalls of impulse buying.

Before buying your first, second, or succeeding big-ticket items, some things require careful consideration and planning. So take your time.

Disclaimer: I am not an expert. I wrote mainly from my experience, learnings, conversations, and research about big-ticket items. If you need further information, please talk to your trusted professional.

What are big-ticket items?

A Car And A House Are Common Big-Ticket Items
Photo By Kam Pratt On Pexels.com

Big-ticket items are typically expensive purchases that require significant money or investment.

Big-ticket items include houses, cars, high-end furniture and appliances, electronic devices, and other similar products.

You may need to secure external financing and commit to a long-term loan when making large purchases like a house, a lot, or a car.

To ensure you make an informed decision, it’s important to consider the following factors before making a big-ticket purchase.

Big-Ticket Item Considerations:

1. Why do you intend to buy this big-ticket item?

In every decision, especially a major financial decision, you must first establish the reason behind the purchase. It may even require consulting with your partner or your family.

For instance, Filipinos consider a house or a car an excellent investment and a status symbol of success. But if your main reason is about status, you must carefully look at the pros and cons of the purchase to avoid being trapped in the rat race for a long time.

I know many people who buy big-ticket items and finance them through long-term loans, which often strangle them in a job they hate because they can’t afford to lose a source of income.

Sadly, some people buy big-ticket items even if they don’t need them and can’t afford them yet. I found this happening to some entry-level employees taking out loans to buy houses or cars with their current salary, where almost nothing is left – leading to a debt cycle.

Another example is the shared experience of OFWs in buying a house in the Philippines while working abroad for several more years. They intend to buy it as an investment and prove their hard work.

However, suppose the house they’ve built is for their family’s use. In that case, it is not an investment since you will not earn any income from it.

An apartment or a rental property is better if you intend to stop working from abroad soon since it will generate a passive income once you return home permanently.

So be clear on your why. Never buy a big-ticket item based on emotion or peer pressure; you will only have a hard time, and your finances may suffer.

2. Are you ready for the lifestyle and budgeting changes of buying a big-ticket item?

Buying a big-ticket item, especially a house or a car, drastically changes your lifestyle.

For instance, if you buy a new car, you must consider parking. So, if you’re currently renting in Metro Manila, you must consider a parking lot aside from your apartment preferences.

You will also need to consider the added costs of owning a car, like gas, maintenance, registrations, parking, and toll, to your current budget.

Some young people buy a car with their entry-level income. Then when the cost of gas increases or they discover the cost of parking and toll and don’t have the money for it, they revert to commuting.

Another example is with houses. Typically, the cheaper townhouses near Metro Manila are located in the nearby provinces of Rizal, Laguna, Bulacan, or Cavite.

So, if you buy a house outside the metro, then you should also consider the added expenses and stress of transportation.

A farther housing location may even prompt you to buy a car along with your new house. If this happens, you will also increase your monthly expenses in the financing, especially if you took out a loan for both.

3. How do you plan on financing this big-ticket purchase?

Another consideration when buying a big-ticket item is how you’ll pay for it. Do you plan to take out a loan or buy it in cash?

Again, the most significant purchases you can make are a house and a car. So they usually cost a hefty amount, making the usual route to buying them through financing and loans.

However, before you can take out a loan, the bank or the lending institution must look at your current income, credit history, and capacity to pay. It may also require a co-maker or guarantor before approving you for a loan.

4. Is it the right time to buy this big-ticket item?

After ensuring you have valid reasons for your purchase, are ready for the adjustments in your lifestyle, and have the necessary funds or financing, the next factor to consider is timing.

Though this is not as big of an issue when buying a car, it is a significant consideration when buying a house, especially for singles and unmarried couples.

If you’re single and plan to stay that way, buying a house can be justified. However, if you’re single but committed, you should consult your partner about this decision.

There are many instances when unmarried couples decide to buy a house together, break up, scrap their plan for the home, and divide the spoils. So, it is still best for couples to get married before buying a house.

Another consideration for the timing of buying a big-ticket item is the current interest rate. The interest rates are set by the central bank or the Bangko Sentral ng Pilipinas when inflation is high.

Theoretically, central banks increase the interest rate to curb inflation by discouraging companies and people from spending and borrowing money while encouraging them to save.

So, purchasing your big-ticket items will be more expensive if you plan on a loan for a new house or a car during a high-interest rate season.

5. Put your plan on paper.

Finally, when considering the first four, you must put your action plan on paper or computer screens, not just on your mind. 

Writing your goal in black and white is essential to have more focus and motivation. It is also easier to visualize and revise if it’s written.

It is also essential to see if the numbers are adding up because if you realize you’ll have to pay a high-interest rate for a long time, you may rethink other options.

For example, if you realize that you don’t have enough savings or salary to get approved for a loan upon completing your action plan, you may consider renting first while saving more. You may even try looking for a higher-paying job.

Another is if you’re planning to buy a car but don’t have enough money for the down payment or the price is too expensive. In this case, you may consider purchasing a second-hand car.

Buying a relatively new but second-hand car from a reputable seller may save you a lot since a new car loses 15 – 20% of its value in its first year. So it is a logical choice to make.

Final Thought

Buying big-ticket items are some of the goals of many young adults because it validates their hard work and helps them realize their dreams for their family.

However, since these purchases are usually expensive, you must consider many things and not be too emotional or excited about owning a new house or car.

Remember, these purchases are major life decisions affecting many aspects of your future life, especially your financial stability.

So pray about it and ask for God’s wisdom when deciding major life choices.

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