Big Purchases Don’t Have to be Painful
Published July 3, 2019
By Jordan Ottaway
Then your conscience chimes in asking how you plan to pay for it. Bummer, right? Don’t worry, we’ve all been there.
Big purchases, or big-ticket items as some call them, can encompass many different things. It can be a new TV, a new car, your first house, a holiday gift for a loved one, or a new piece of tech you’ve been reading about. While some have bigger price tags than others, all require the same amount of preparation and consideration before purchasing.
The last thing you need to do is feel overwhelmed and think you can never save for what you’re wanting to buy. Instead, break it down into bite-sized chunks to make it more manageable. I’ll help you get started.
How much do you want to have saved by the end of the week? How about the end of the month? Before you start putting money back, it’s a good idea to have a savings plan detailing your timeline and saving goals you’ve set for yourself.
What would this look like? Let’s say I’m wanting to buy a new camera for $800 and want to have enough saved up in 4 months. My first step would be to set monthly, or weekly, saving’s goals for myself so I can stay on track. That would mean I would need to save around $200 per month or $46 per week. Then if I don’t think I could save that in much in 4 months I could move the numbers around to fit my budget.
Setting goals is a great method for saving and helps you establish a timeline that works best for you and helps you stay committed to saving.
This is a given, but it’s a big piece of the puzzle. If you don’t know where your money is going, it’s going to be difficult to save anything. As soon as you decide the timeframe for your purchase, you’ll need to sit down and add this into your monthly budget. (Or weekly budget if you prefer.)
Look for expenses you can take out or cut back on while you’re saving for your purchase. If you pay $30 a month for a streaming service you think you can live without, put that money towards your special purchase fund.
Hey, you may even find that you can do without a certain monthly expense and choose not to pick it back up. That would be a nice little boost to your overall savings.
Think about how many times you’ve needed to take a little from your savings to cover an expense. I know I’ve done it a few times and felt guilty about it afterwards. When you start saving for your big purchase, open up a dedicated savings account so you don’t have that temptation of making a “necessary withdrawal” as you save.
While the ticket price seems unattainable at first, looking at your journey to actually making this purchase in bite-sized pieces makes it seem less scary. This philosophy has always worked for me and I hope it works for you, too.
Depending on how often you want to add to your special purchase fund, it can be a hassle to remember to deposit $46 every week or $200 every month. That’s why you should cut that out entirely and have it automatically transferred to your savings account.
For starters, it makes it MUCH easier for you because it guarantees that you won’t miss a deposit. If you ask me, I recommend you do it for all your savings, but that’s for another time.
Say you want to set it up with your credit union account. All you need to do is log in to Online Banking and schedule a transfer. Then you want the transfer to go to your savings account and select how often (i.e.: Weekly, monthly, etc.). That’s all there is to it.