Budgeting for regular, ongoing expenses is one thing but saving up for a large expense is a different challenge altogether. On top of managing your weekly spending and saving, you also have to put extra cash aside for upcoming purchases or repayments. Massive expenses may only come up occasionally for most people, but they tend to arise more often than our wallets might like. Your big expense could be something you need, like a deposit for a new home or new car, or just something you want, like an entertainment system or the latest smartphone. Either way, achieving the purchase you’re planning for or dreaming about isn’t beyond reach; you just need to be patient, persistent and follow the tips below.
Visualise Your Goal
It can be hard to rein in spending or live a less-thrills lifestyle. To make it easier to do this, it helps to have a clear picture of what you’re working towards. This might even involve literally having a picture of your goal, such as a photo of your dream car on the garage wall or a Pinterest board displaying the range of designer clothes you’re saving up for. Whether your picture is tangible or purely in your mind, regularly visualising your goal will make it easier to walk past tempting stores and say no to that superfluous plate of sushi. This will also help you to achieve the following step.
Crack Down on Impulse Buying
If unexpected and unnecessary spending is blowing holes in your budget, your big expense is further away from reach than it should be. Once you’ve recognised that buying attractive things without putting much thought into them is an issue for you and your savings, take steps towards cracking down on this problem. For example, this might mean buying your groceries only at supermarkets that aren’t located in shopping centres or deleting your eBay account temporarily until your big expense has been taken care of.
Even with precautionary steps taken, impulse purchases can continue to create havoc in your finances if you don’t have a clear plan for where your income is directed. Analyse your weekly or fortnightly earnings and allocate set amounts to be distributed between unavoidable expenses, allowable spending, regular savings, and specific savings for your big expense. If you earn a predetermined salary each week, this will be easier; you can decide on fixed values to assign to different categories. If your income fluctuates, it’ll be a little trickier, but consider allocating percentages of your income to different areas with a fixed minimum going towards your large expense.
Eliminate or Reduce Existing Debts
If any significant debts are eating away at your saving attempts, these should be given a high priority while you’re allocating where your income goes. By consolidating and reducing your debts faster, you’ll be able to save more efficiently in the long term with less of your earnings being drained by interest fees. Managing debt is something many people are unskilled at though, so don’t be embarrassed to seek professional assistance from an agency such as Debt Rescue. This may not be a short-term solution in terms of saving for a large purchase, but the big expense in your near future will be far more manageable if you have less troublesome debts already hanging over your head.
The more you think about how expensive a significant purchase will be, the more overwhelming things can become in your mind. Remember to keep your goal in mind and take logical steps towards incorporating this large expense into your existing budget. Some clever decisions and strong willpower could very well make the difference between purchasing that item sooner rather than later… or never.