7 Important Questions to Ask Yourself Before Splurging on an “Investment Purchase,” According to Money and Resale Experts

October is Money Month at Apartment Therapy! That means we’re sharing stories about saving money to buy a home, hacks to help you stick to your budget, and more all month. Head over here to see them all!

The investment purchase — it’s a loaded concept, and a popular one at that. Page through any magazine or browse a website and you’re bound to see it tied to a handbag, a chair, or a piece of art. An investment piece is something you’d likely spend a decent chunk of cash on, with the promise that you’ll have it for your entire life.

While certain items do become mainstays of your home life or your wardrobe, others end up collecting dust — and regret. If you’re considering making a big purchase of your own, whether it’s a classic Chanel bag or the leather sofa you’ve coveted for years, there are a few important questions to ask yourself before taking the plunge.

If you have the cash on hand and have budgeted for the purchase, by all means — go forth and buy it! But if you’re charging the piece to a credit card with no plan to pay it off quickly, or are scrounging up money that could better be spent elsewhere, hit the pause button. 

“​​A lot of people jump on a home splurge right away without planning for it, but this often results in debt because they pay with a credit card or finance a big ticket item like a new couch, which can cost you a lot in interest down the road,” money-saving expert Andrea Woroch previously told Apartment Therapy.

A few simple budgeting tips can help you save the money needed to nab the item that has stolen your heart; Woroch recommends doing things like canceling memberships and plans you don’t use, as well as skipping discretionary purchases, and then adding that cash to a dedicated savings account each month until you hit your goal.

If you’re shopping to get that irresistible dopamine hit, step away from the checkout screen or put your credit card down! Therapist Jessica Couch advises playing the waiting game before hitting the “Buy Now” button. ​​“Go ahead and add the items that are calling your name to your cart, but then wait at least six hours to finalize the purchase,” she previously told Apartment Therapy. “Often, we get distracted with other parts of life — like work, school, or friends — and we will be less likely to complete the purchase.”

If you’re considering spending a big-to-you amount of money on anything from a watch to a bag to a side table, it’s important to consider whether or not the item will actually be integral to your wardrobe or home, or if you simply hope it will serve that purpose. You may have heard the old “cost per wear” rule about dividing the price of an item by how many times you’ll use it in a certain period of time, and this adage holds a lot of truth. 

Even the experts acknowledge that utility is the name of the game here. “Deciding on a designer handbag or accessory is a big decision, since the item needs to serve you,” Charles Gorra, the CEO and founder of designer resale site Rebag, tells Apartment Therapy. “Ask yourself what your general style is and think about how you’d like this item to work for you.” Are you planning to use the bag for work? Will you wear that piece of jewelry a few times a week? If it’s not something you know you’ll reach for, that might be a sign to skip it, or at least consider buying a similar item at a lower price point.

You can want an item more than anything, but that doesn’t mean it’s the perfect fit for your daily life. Gorra advises investing in materials and colors that make sense for your lifestyle — and this applies to furniture and decor as well as handbags and coats. If you’re a frequent commuter or live in a place with snowy, slushy winters, you may want to veto a rug that requires special cleaning. Do you have little kids? It may not be the best idea to invest in something you’ll need to be precious with. 

He also recommends asking yourself a few questions, including, “Would this item have a lot of opportunities to become scratched or damaged, and are you prepared to maintain the condition of the item, like with a timepiece that needs servicing or with a Chanel lambskin bag that needs gentle cleaning?”

Jen Smith, the creator of Modern Frugality, agrees, and recommends thinking critically about the season of life you’re currently in before taking the plunge. “I love the concept of ‘Buy well, buy once,’ but you have to be sure you’re in the right season to acquire well,” she tells Apartment Therapy. “If you have a puppy or young children it doesn’t matter how well made your sofa is, it will get destroyed! If you travel a lot, what’s the point of having a beautiful piece of art that will sit in a storage unit?” 

Is the item you’re considering a hot trend right now? Consider how it will both look and fit in your life two, five, or ten years down the line. Will you be able to pinpoint the time you bought it because it’s so tied to a design fad or style moment, and if so, are you okay with that? If you want to invest in a piece of furniture or clothing, it may be beneficial to opt for a style that is meant to last, such as a black leather jacket or a Chesterfield sofa, rather than something currently trending on Instagram and may look dated in a few months or years. 

The resale and consignment markets are booming, so if you’ve had your eye on a certain bag, belt, or watch, you may be able to find it for a slightly lower price point at a resale shop. A reputable retailer will ensure the item is authentic and in good shape, and that you’re getting a reasonable price for that item. 

“Many resale items are no longer available on the retail market and that in itself makes it a wise investment piece,” says Daune Stinson, owner of designer resale shop June Resale in Minneapolis, Minnesota. “Luxury brands discontinue pieces and that, depending on the piece, creates a coveted piece that can hold its value.” 

Buying a secondhand piece may also make you feel better about actually using it. “It’s comforting to some people that they aren’t the one to put the first mark on an expensive item,” Stinson shares. “They feel more comfortable using it.” And sometimes the signs of wear add extra character to your piece, and create a story you can share with people who ask about it.

You’ve made the purchase, received the item, and discovered that it’s just not working out for either your home or your life. This happens — and it’s why thinking ahead to a potential plan B can give you peace of mind. In other words, if you can’t return whatever it is you bought, is there another safety net in place so you can recoup some of your investment? 

If you’re considering splurging on a bag, piece of clothing, or jewelry, Gorra advises understanding the resale potential of what you’re planning to buy before making the purchase. “While not all luxury shoppers think about reselling an item in the future for profit, it’s safe to say that most don’t want to hear that an item they purchased for $1,000 only retains 10 percent of its retail price just two or three years down the line,” he explains.

It’s a good idea to do a bit of clicking or calling around on resale sites and consignment shops to see what your desired item is currently selling for. “We highly recommend comparing a brand new item’s retail price with its resale value, so that if you’d like to sell it down the line and get some money back, you’ll have a more accurate sense of its future value,” Gorra says.

The same goes for furniture and home goods. Will your couch garner attention on Facebook Marketplace or Craigslist if you want to rehome it? Is the item you’re considering a collectible that will increase in value due to demand or scarcity? Only you know your financial status and security, but if you’ve done your homework and thought things through, you may be able to make the purchase with confidence.