Throughout our life, there will be times when we make a big purchase, like buying a car or purchasing your first home. When big amounts of money are involved, it’s easy to get stressed. Momentum and pressure can take hold and push you forwards and towards a decisions that might not be in your best interests. My wife and I recently bought a new home and, through this process, we learned a lot about how we approach (big) decision-making. I’m hopeful that we can carry these lessons into smaller decisions in my career. Here are four lessons we learned from making a big purchase.
Know yourself (and what you want)
Part way into our search for a new home, we almost put an offer on a property that checked hardly any of our boxes. We felt pressured to move forward, partly because we’d been seized by the momentum of securing “a great deal” and partially because we hadn’t really spent much time defining what success looked like for us. After we narrowly staved off disaster, we took some time to consider the principles we wanted to apply to our search and got really clear on our end-goal. We had a laundry list of attributes we hoped our new home would have (same neighbourhood, three bedrooms, super functional kitchen, minimal maintenance w/ maximum style options to make it our own). Once we had our principles in place, we could apply a filter against any purchase we were considering – a particularly helpful approach when you are emotionally jazzed in the moment and there are many options floating around. When we ended up putting an offer on a home, it was clear to us that this place met (almost) all our principles and was a good bet from both a pragmatic and emotional standpoint.
Give the gift of time
While this isn’t always a luxury in every market, the more time you can give yourself to consider an opportunity or purchase the better. Time is the ally of effective decision-making. Why? Because it allows for consideration and reflection. The more you can work this into your decision-making process, the better you will be. Resist those around you that demand you make a decision this hour, this evening as you’re far more likely to make a decision that you will later regret. While immediacy could be a crucial factor in some (rare) market scenarios, most often it’s just a sales technique. Don’t get caught up in it!
Create a buffer
Whether it’s in a negotiation setting or in the search for a new home or car – creating a buffer between yourself and the other party is a crucial tactic that I’ve found frequently very helpful. It allows you to play the “honest broker” – even if you aren’t in fact on the side of the salesperson – and it gives you time and space to consider your options. When I purchased a car four years ago, I framed any final decision as my wife’s call and out of my hands. Since the salesperson was only dealing with me throughout the process, I was able to defer any negative news or offers to a third party and then return to the salesperson requesting their “help” to get a deal that would be acceptable to my wife (and me). The tactic worked well – scoring us discounts and making my family feel like we were in control of the process as opposed to the dealership.
Resist the force
One of the most challenging situations for making a big purchase is the pressure to complete a deal the more time you’ve sunk into the process. The pressure comes from both external sources (salespeople on both sides of the deal) as well as your own emotional attachment to getting it done. The longer the process takes, the more fatigued you may feel. Momentum is a curious thing because it can push you into making decisions that significantly diverge from your stated goal. Like many problems, the first step to inoculating yourself is to recognize that you are indeed being pushed into something. Next step is to remind yourself (over and over) that in most cases, there are always more fish in the sea. Don’t fool yourself to think this car, boat, vacation home or house is the only possible option. Always be mindful of your limits – soft and hard – and how these limits interconnect with your principles.