By Shawn Peters and Bob Barber

It has happened to the best of us. We have a big financial decision, and we jump the gun to make a large purchase before we ask for advice or really think things through, leaving us financially vulnerable afterward. Since making big financial decisions is something that we all face eventually, we’ve put together 7 recommended steps you should take before making a large purchase.

These steps can be used for anything, such as buying a new car, your first house, or even new appliances. Gaining advice and insight through using these seven steps can help take away the stress and fear of the unknown when it comes to your finances. Knowing you have the monetary means to confidently make a large purchase can offer an indescribable feeling of financial freedom.

1. Pray About It

James 1:5 “If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you.”

As a Christian, all major financial decisions are spiritual ones as well, especially if it is a large one or will affect our giving. Remember, we’re the manager and God is the owner.

2. Turn To God’s Word

Proverbs and Ecclesiastes are great go-to books. There are over 1500 scriptures on stewardship in the Bible. A great example is found in Luke 16:10-13

3. Be Patient

Galatians 5:22-23 “But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things there is no law.”

Whatever you’re purchasing, 98% of the time there’s more of it somewhere else. Don’t fall for the urgency trap of “it’s only on sale right now!” because there’s almost always other options. Ask God to give you a peace about the purchase if it’s right or to give you a check in your spirit if it isn’t.

4. Use Math – Run A Financial Analysis On The Purchase

Luke 14:28 “For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it?”

While being patient, research the purchase to see what it might be worth in 3, 5, or 10 years. Compare that with what a similar investment would be worth in a growth or balanced portfolio so you know your potential opportunity cost. Also, look into what the ongoing cost will be on either a monthly or yearly basis.

5. Keep Emotions Out Of It

Emotions and Finances mix together like oil and water – they don’t and never should! Step back for a second to determine if this is a “need” or a “want”. A “want” is ok if you can easily afford it but not if you can’t.

6. Seek Experienced Financial Advice

Job 12:12 “Is not wisdom found among the aged? Does not long life bring understanding?”

Discuss the purchase with your spouse and be sure you’re both in agreement. Also ask an experienced Financial Advisor as well as a parent, grandparent, or older friend who are financially successful if they believe it’s a good financial decision in the long run.

6. Apply Live, Give, Owe, Grow

There are only four ways money can be spent: for living (Live), giving to charity (Give), debt payments or taxes (Owe), or investments/savings (Grow). When one category goes up, one or two of the others will be affected. Money has to come from somewhere.

CAUTION: Many small purchases can equal one large purchase!

  • Too many small purchases can quickly add up to the same as one large purchase
  • This is an easy trap to fall into but can be avoided by keeping and STICKING to a monthly budget

You can make big financial decisions confidently as long as they are done with:

  1. Wisdom
  2. Insight
  3. Without affecting present or future giving
  4. Without affecting present or future savings
  5. A really good understanding of all costs involved