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As many homeowners know, it only takes one upgrade or purchase to make a big difference in your home.
Money experts Bernadette Joy and Jannese Torres-Rodriguez point to the new sofas they bought as game changers for their home. They say these updates made immediate and significant improvements to their lives at home.
For other people, maybe it’s a new rug or a side table. Or even a new decorative piece for an entrance.
But how do you plan and budget for this type of purchase? Joy and Torres-Rodríguez shared some tips based on how they approached their purchases and how to weigh the purchase in the larger context of their lives.
For many Americans, credit cards can be a powerful tool for everything from everyday staples to once-in-a-generation home furnishings. The best credit cards offer ways to finance larger purchases and save on interest, or earn rewards on large purchases that are paid off before the next statement arrives.
The new Key Rewards Visa card is a great example. A collaboration between high-end housing retailer Williams-Sonoma, Inc. and Capital One, the card offers great ways to reward yourself by getting even more out of big planned home purchases. It also works and earns the same rewards across the entire Williams-Sonoma family of brands, including Williams-Sonoma, Inc., brands like Williams-Sonoma, West Elm and Mark & Graham, both online and in-store. Combined with the financing opportunities that come with the card, it can be a useful tool that gives you extra rewards for all your cozy costs, benefiting you now and in the future.
Here’s what Joy and Torres-Rodriguez have to say about the game-changing home purchases they’ve made, and what you should know about paying for home purchases:
money expert Bernadette joy believe in the power of a physical object to help you visualize and manifest the life you desire. And for many people, that life begins at home.
Joy says she downsized from a 4-bedroom house to a 2-bedroom condo during the pandemic to be closer to the mountains. A big but necessary household purchase for her was a sofa for the living room, she recently told us. And the reason goes beyond providing a place to sit.
“It has a special meaning because it represents how I wanted this time in my life to be,” says Joy.
Joy is approaching financial independence and early retirement (known by the acronym FIRE), and she wanted her sofa to evoke the same comfortable, welcoming and inviting environment that she hopes to feel as an early retiree.
“When I went looking for a new sofa, I tried to imagine my life on it during early retirement: reading books, curling up by the fire under a warm blanket, catching up with friends on video, and drinking lots of tea,” says Joy. “Having a sofa that fit that image helped me start practicing what it would be like to retire early.”
Meanwhile, Jannese Torres-Rodríguez, founder of the personal finance blog Yo Quiero Dinero, took her living room and home theater setup to a new level with a power reclining sofa.
“It was definitely not in my character to splurge on furniture,” Torres-Rodriguez told us recently. “But I was happy that I didn’t decide to go the cheapest route and instead buy the furniture that I could see myself enjoying, not just myself, but with friends, with family, with people who come, over the years and years. to come”.
With a little planning ahead, Torres-Rodríguez financed the sofa, along with a dining table, in a way that allowed her to pay for the purchase on time and interest-free. This type of big-ticket financing is common on many major credit cards, including the Visa Key Rewards card. For people with a plan to ensure they pay off the balance before the promotional period ends, this approach can help spread out a large purchase over time. “It was kind of a no-brainer because I knew it wouldn’t take me five years to pay this off.”
And the purchase has already proven worthwhile, she says. And it’s also much more than a place to sit for Torres-Rodriguez.
“It’s great because we can really get everyone to meet, talk, chat, everyone can be comfortable in the same space,” says Torres-Rodríguez. “I remember growing up when people had to come over and we would have big house parties. I’m Latina, so we always had a million people in our house. Sometimes we ended up sitting on the floor, we had to buy folding chairs and there was never a way to get comfortable.
Planning and budgeting for large purchases
For Joy, shopping for expensive home goods usually happens in smaller steps with a lot of advanced preparation.
“In the last three houses I bought, I put aside at least $1,000 per room to save on furniture and décor as part of what I saved to buy the house,” says Joy. “For our two-bedroom condo, I saved an extra $5,000 to cover the things I would need for the two bedrooms, dining room, living room, and kitchen.”
Joy decided a year in advance to start saving. She divided $5,000 by 12 and put at least $416 per month in a high-yield savings account in the 12 months before she bought her home.
“Even though it was more expensive than I’d ever spent on a sofa, I was able to justify it with my one-dollar rule,” says Joy.
The dollar rule says that something is generally worth buying if it equates to $1 per use fairly quickly. This guide can help put big purchases into perspective and avoid the guilt many people are used to feeling when it comes to big spending.
“If you’re buying a sofa that costs $1,000 and you use it almost every day, it would only take about three years for it to cost $1 per use,” says Joy. “When I think about it that way, I realize that I am not wasting money, but investing in something useful.”
No matter how you make home purchases big or small, having a plan goes a long way toward keeping them within your budget. No matter how much time people spend at home, incremental upgrades and new pieces of home furnishings can greatly enrich people’s lives. But it’s important to pay for purchases before promotional periods and interest kick in, which could set you back in the long run.
Reward yourself using the new Key Rewards credit card program
Saving ahead of time is a great way to budget. In the meantime, using a credit card with rewards and promotional financing can provide additional benefits.
The Key Rewards credit card program makes it easy for people who love to improve their homes to earn rewards at major brands like Pottery Barn, Williams-Sonoma and West Elm.
With no annual fee, the card offers 5% rewards on all purchases at Williams-Sonoma, Inc. brands, or 12-month promotional financing on purchases of $750 and up (after 12 months, a 24-month variable rate kicks in). .99%). Cardmembers can also earn 4% back in rewards at grocery stores and restaurants (excluding fast food), and a special 10% in rewards across the entire family of brands within the first 30 days of account opening. Financing can be a great way to spread out a large purchase over time, while rewards can lower the total cost of future home improvement purchases.
Whether you’re using special financing or saving in advance to pay for a big purchase and bank rewards for future purchases, planning ahead is essential. If you use financing options, make a plan and budget to pay for purchases in installments over the financing period to ensure you pay before interest charges are applied. These card benefits offer customers ongoing opportunities to improve their homes:
- Versatile use for home interior enthusiasts: The card will work at all Williams-Sonoma, Inc. brands, including Williams-Sonoma, Pottery Barn, West Elm and Mark & Graham, both online and in-store.
- A special welcome offer:
- New cardholders will earn double rewards at Williams-Sonoma, Inc. brands, a total of 10% back in rewards, for the first 30 days of account opening.
- Enhanced Rewards That Help Fund Your Elevated Home Experiences: Earn rewards at the following rates:
- 5% Rewards in the Williams-Sonoma Family of Brands
- 4% in supermarkets and restaurants (excluding fast food)
- 1% everywhere else Visa cards are accepted
Considerations for Charging Major Purchases
There’s no way around it: Furniture and household items can easily add up. Especially when you’re the kind of person who takes pride in making your home warm and welcoming.
Using a credit card for major purchases gives consumers the opportunity to earn rewards on these big spends. However, there are some basic tips to make sure you’re doing it without jeopardizing your long-term financial health.
It’s important to remember your credit score and consider how adding another card to your wallet may show up on a credit check.
“I definitely keep in mind if I’m going to make other large purchases in the same amount of time,” says Torres-Rodríguez. You don’t want to ruin your credit for something that may be more important like applying for a mortgage, she says. Opening too many credit card accounts right before applying for a mortgage can be a red flag for some lenders.
Lastly, always make sure you have a budget to pay off the card in a timely manner. Experts recommend paying off balances in full when possible, or having a plan to pay off the card before the interest-free period expires.
“I like to use credit cards for basically all purchases,” says Torres-Rodríguez. “I never use my debit card for anything. If I know I’m going to buy something that’s a higher value item, what I like to do is just save the money in my high-yield savings account.”
Once you have the money saved, you buy it on credit and then pay it off before starting the habit of revolving debt. That way, he earns the rewards for future purchases without paying interest.