3 quick tips to save
Large purchases, whether it is the desire for a new car or the need for a new roof on your home, can be stressful. Finding the funds to procure the purchase and ensuring you don’t place yourself further in debt, can seem like a difficult road to navigate. While it might be tempting to buy a large purchase quickly on credit, it is more fiscally responsible to save for the purchase. You’d be surprised by how fast you can save up your pennies to move forward with a large purchase, as long as your process is streamlined.
Automate Your Savings
Making your personal savings automatic allows you to place your goal on auto-pilot. Figure out how much money you’d like to put towards your purchase (without cutting your budget short), and set up automatic transfers to a savings account on the day you get paid. If you are paid bi-weekly, for example, set up an auto-transfer for the 1st and the 15th. By making saving automatic, you won’t even notice the cash before it's been moved into your savings.
Periodically check your personal savings account and reassess the amount of money you place into that account. If you have a set amount you’ll need for your purchase, it can be helpful to figure out exactly when you’d like to reach your goal, then work backward regarding how much you’ll need to save to meet a deadline. When you are close to your goal, assess your budget again to figure out where you'll divert the money once your personal goal is met.
Use Lump Sum Payments to Reach Your Goals
Sometimes you’ll find yourself with a sudden windfall of money. Maybe you overpaid on your taxes, or you were given a refund from a medical expense through your health insurance. Perhaps you’ve been given a hefty sum of money for a holiday. Wherever the money comes from, be disciplined enough to set it aside to reach your personal savings goals. It is easy, when extra money comes your way, to spend it on something indulgent that you’ve been lusting over, but if you have a larger goal in mind, it is a better idea to set those sums aside. It may even help you reach your goal sooner than you intended.
Maximize Your Budget
Maximizing your budget to meet your financial goals is a good place to get started. Make sure your budget is as efficient as possible, by going through each item and ensuring you’re not overspending, or, in some cases, overpaying. If you have a large purchase you need or want to make, you may need to realign your financial goals to make it possible. For example, if you’ve been paying double on your student loans, you may want to cut back your payments a bit to meet your purchasing needs. You can always add more money to those payments once your goal is reached. Do make sure that you are meeting all of your payment obligations, and that you are not removing funds from an emergency personal savings for your purchase. Keeping your credit in check, and ensuring you have fallback cash in case you need it, is still more important than a purchase.
A big purchase can be exciting, and it can also be stressful. By saving up for big purchases, and owning them outright, you may be able to circumvent some of the financial stress that comes with a large purchase, and, in turn, may help you to not only enjoy your purchase more, but to meet your other goals more efficiently.
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