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Tips for Saving for a Large Purchase

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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 a million different things, where do you  start? Simple, you need to set goals.

Say you want to get away for a weekend some time, say a few months from now. That could add up to a thousand dollars for transportation, hotels, eating out and a bit extra for gifts.

Now let’s figure out, how much you’ll need to save every time you get paid. It’s really not that difficult.

First, how many paychecks are there between today and your vacation? 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 vacation, $1,000, by the number of times you’ll be paid: 10 times. That means you’ll need to save $100 per paycheck to reach your goal.

If that seems doable, then go ahead and start saving. But if it’s a little daunting 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 a 8 months instead and then you’d only have to save a little less each paycheck. That could be more manageable.

Or, if you still want to stick to your vacation goal, you’ll have to find the money elsewhere in your budget or make some small adjustments to save a few dollars here and there.

Once you figure out how much to sock away, you’ll need somewhere to put it. You can always deposit it into your bank account, or even in under your mattress. But why not set yourself up for success by putting it where you won’t 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.

 

HT: https://bettermoneyhabits.bankofamerica.com

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