When you have something big that you want to buy, whether it’s something actually big like a new home or that’s just a big deal to you like a new road bike or that handgun you’ve been eyeing, it’s best to come up with a plan to pay for this item in cash rather than having to go into debt to get it. However, delaying this gratification through a savings plan can be tough, especially if you know it will take you a while to afford what you want.
So to help make this whole process a little easier on you emotionally and encourage you to get that money and that big item sooner, here are three tips for creating a savings plan for a big purchase.
Know Exactly How Much You Need To Save
The very first thing you need to figure out is exactly how much you need to save in order to make this purchase. Without knowing this, you can’t really make an accurate savings plan in the first place.
As you calculate how much you’ll need to save for your savings plan, G. Brian Davis, a contributor to MoneyCrashers.com, recommends that you also research some more affordable options for the item that you want. Sometimes, you can find a version that’s a little less expensive without sacrificing quality. And if you can find this, you may be able to reach your savings goal faster. Just make sure you calculate things like tax, too, as this can get expensive with more expensive items.
Decide What You’re Willing To Give Up
If you’re trying to meet your savings goal but don’t have plans for bringing in more money than you’re currently making, Taylor Cenicola, a contributor to Credit.com, recommends that you take a look at your others expenses and decide what you’re willing to give up as you work toward this new savings goal.
Generally, the more you’re willing to give up now and put toward your savings goal, the sooner you’ll be able to save the necessary money, get the item you want, and then get back to your former budget.
Make Savings One Of Your Fixed Expenses
Once you’re ready to actually start moving money into your savings account for this big savings goal, SmartAboutMoney.org advises that you make this savings one of your fixed expenses rather than something you put money toward if you have some excess at the end of the month. By paying yourself first, you’ll ensure that you’re making this savings plan a priority and that you will eventually meet your goal that you worked so hard for.
If you have a big purchase you’re wanting to make, consider using the tips mentioned above to help you create a savings plan for this item.