Whether it’s a house, a new car, or a once-in-a-lifetime vacation, major purchases often require you to save money beyond what you’ve already socked away for a rainy day. Here’s how to get started on accumulating the extra funds you need to make that big buy.
Find Out How Much You Need
Although it may be a while before you make your purchase, it’s important to do some research right now to understand exactly how much you’ll need to save up. For instance, even if you plan to finance a new Kia Rio or Kia Sportage, learning the purchase price of a new Kia for sale gives you a starting point for your calculations.
With the sticker price in hand, you can run the numbers and come up with a down payment amount that will provide you with a manageable monthly installment. You’ll then have a clear goal to work towards and can get started saving for your purchase.
Establish a Timeline
Although it doesn’t have to be set in stone, establishing a timeline by which you want to achieve your savings goal allows you to plan realistically. Being overly confident in how quickly you can get the cash you need may be discouraging and can lead you to abandon your plans altogether.
Be practical in your planning. If you’ve already determined you need to save $12,000 toward buying a new home, setting a deadline of one year to reach that total is only feasible if you’re able to set aside at least $1,000 per month. If you don’t think you can save that much and the dollar figure you need to reach is non-negotiable, then you need to adjust your timeline.
Make Saving Automatic
It’s terrific if you’re self-disciplined, but even the most committed savers can be tempted to divert funds earmarked for their goals to buy something more immediately rewarding. For that reason, when you’re planning for your big purchase, it’s a good idea to open a special account to hold your savings. Then just schedule recurring transfers from your checking account so you don’t forget, or neglect, to add to your savings fund as planned.
Add All Unexpected Cash to Your Savings
Anytime you receive an unexpected cash infusion, use it to boost your savings rather than splurging on something else. Whether you get a raise at work you hadn’t planned for or find yourself holding a winning raffle ticket, committing any surprise windfalls towards achieving your goal means you’ll reach it quicker than you planned.
Saving unexpected cash can also provide a bit of wiggle room if you come up short when making your regular contributions. After you reach your goal and make your big purchase, any extra money you accumulated will still be there, ready to be spent on whatever you like.
Start Saving Today!
Now that you’ve gotten some great tips for how to save for a big purchase, it’s time to get started. With a bit of discipline and commitment, you’ll be enjoying your new car, home, or vacation before you know it!