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When Should You Make That Big Purchase?

At every stage of life, there are different purchases to be made. And once you reach adulthood, you are expected to have a car, home, insurance, etc… When is the right time to make these purchases?

In Your 30's

For many people, they do not start to get serious about their financial lives until their 30's. By the time someone reaches this age, there are several things that they should buy. Although most people do not think about this, one of the most important purchases that anyone will make is their mattress. Mattresses can be expensive, but the average person will spend about one third of their life in bed. A good quality mattress can make all the difference in a person's health and energy levels and are well worth the investment. If someone is looking at a high quality mattress and can not afford it, many furniture places will offer zero interest financing. This is a great time for someone to have a good credit score because they can qualify for financing on the mattress. Otherwise, they would have to save up and pay all of the money up front in cash for the mattress. Many people simply do not have thousands of dollars to spend on a bed.

Another purchase that many people should make by the time they are in their 30's is a car. Cars are a big investment for many people, and a high quality car will generally run at least $20,000. There are very few people that walk around with that much money to spend all at once, so this means that a solid credit history is even more important in this step. Car financing is the most popular way in which people purchase cars, and a good credit score will save thousands over the life of the loan by getting a better interest rate.

Related Article: Are You Making These Stupid Shopping Mistakes?

In Your 40's

By the time that most people reach their 40's, they have a solid grasp on what they want to do in life and they have their finances in order. This is a perfect time for many people to purchase their homes and is perhaps the best example of when having good credit pays off. The most common way for a person to purchase a home is through a thirty year mortgage. When qualifying for a mortgage, a person will generally have to have their income verified and their credit score checked. The higher their credit score, the lower their interest rate will be on their loans. Over the life of a thirty year mortgage, a lower interest rate can mean a savings of tens of thousands of dollars.

When buying a home, people also have to buy appliances. Appliances are not cheap, and can generally run thousands of dollars each. After spending tens of thousands on a down payment on a home, many people simply do not have extra money to spend on appliances. This is a great time to use zero interest financing in order to outfit a new home. As you can see, maintaining a good credit score for purchases is important. A good credit score is one of the best indicators of a person's finances and should be viewed through that line of thinking when working to build or repair credit.

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In Your 50's

Finally, when a person reaches their 50's their finances should really start taking shape. When preparing to protect your assets, purchasing life insurance is one of the most important investments anyone can make. Life can oftentimes be very unpredictable, and it is important to have insurance and coverage for the most unexpected events in life. If something were to happen to you, it is important that your family would be covered financially so that your death is not a burden. Many people do not know that they can get better rates on their life insurance with a higher credit score. This can be a savings of hundreds or thousands of dollars per year depending on how expensive the policy is.

Another part of preparing for the final phases of life is changing your home to meet your needs. Instead of spending the money to buy and sell a home, many people make repairs or additions to their current home. Hiring this work out is generally the way that people accomplish this. Leveling the yard, adding hardwood, or adding on a room on the main level are all examples of upgrades that many people make at this stage of their life. Instead of spending their cash, many people will get a line of credit against the equity in their home to pay for the repairs. At the end of the day, credit is one of the most important aspects of a person's finances and can be important for the purchases at every stage of life.

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Yael Kent's picture

Yael Kent is a personal finance enthusiast with experience writing about credit cards, credit repair, debt, and more. In addition to being an editor at Creditnet, she has been featured on Yahoo Finance, Reuters, and other financial sites.

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