Tips for saving for a large purchase
Don’t let buying a big ticket item put you into a financial hole. Get some useful ideas on how to save and pay for a large purchase.
Tips for saving for a large purchase.
Whether it’s something you want or something you need, saving for a large purchase can be pretty easy. But with your paycheck already budgeted for 20 different things, where do you start? Simple, by setting a goal.
Say you want to get away for a weekend some time, say 5 months from now. That could add up to a thousand bucks for gas, lodging, restaurants and a bit extra for souvenirs.
Now let’s figure out, how much you’ll need to save every time you get paid. It’s really pretty easy.
First, figure out how many paychecks you’ll get between today and your five-month goal. For instance, if you get paid twice a month over five months, you should have ten paychecks. So you can divide the cost of the trip, $1,000, by the number of times you’ll be paid: 10 times. That means you’ll have to save $100 per paycheck to reach your goal.
If that seems reasonable, then go ahead and start saving. But if it’s a little ambitious for you, then you’ll have to look at other ways to save your cash. You can always extend the length of time you’re willing to save. So maybe take your trip in 10 months instead and then you'd only have to save $50 from each paycheck. That could be more manageable.
Or, if you still want to stick to your five-month goal, you’ll have to find the money elsewhere in your budget or make some small changes to save a few bucks here and there.
Once you figure out how much to sock away, you’ll need somewhere to put it. Of course you can always plop it into your everyday bank account, or even in a jar on your nightstand. But why not set yourself up for success by putting it where you’ll be less tempted to use it? Like in a savings account you set up for this specific goal, or if you use online banking, most banks offer some kind of automated savings tool.
No matter how you do it, the important thing is to create a personalized savings plan that makes getting to your goal easier. Saving for something you want or need shouldn’t be the cause of financial stress. In fact, if you have a plan in place, you might be amazed at how simple it actually is. Get started, and before you know it, you’ll be packing up the car for your much-deserved weekend getaway.