There are times in life when an unexpected large ticket item must be purchased, and if no money has been set aside for it, a large spend can throw your budget into a tailspin. How can you put some cash aside to be prepared in the event of a large purchase without breaking the budget?
Break it down.
As with any big goal, saving a large amount of money is much easier when broken down into manageable increments. Start with the due date or the date you want to have the money in full, and work backward. For instance, if you need $1200 and have six months until the due date, break that down to $200 per month. Break it down further to make it even easier to achieve; saving just $50 per week for four weeks gets you to your goal of $200 per month. If even $50 per week seems like too much to handle, saving just $10 per day for five days achieves the same goal. Having weekly and monthly goals can be very motivating, and each small savings success helps inspire and lay the foundation for the next.
Automate your savings.
Using the direct deposit feature your bank offers can go a long way toward helping you reach your savings goal. When you save a set amount of money automatically each week, or each paycheck, it can build quickly. If you set up a separate savings account and direct the money away from your main spending source, you won’t be tempted to spend rather than save it.
Save lump sums.
If you receive an unexpected windfall such as a tax return, a work bonus, a holiday or birthday gift of money, sending it straight to your savings account will help build your savings quickly. Since a windfall is an unexpected amount of money, it makes sense to add those funds to your savings account rather than spend it, as it is not part of your regular monthly budget.
Work a side gig.
Picking up extra work is a great way to add to your special savings account and reach your goal sooner. If you have just a few hours a week to work a side job and dedicate that money to your large purchase, from handyman services to housesitting, dog walking to doing yard work for pay.
Be patient with yourself.
Saving cash for a large purchase can be challenging. There may be days when you would rather do something else with your money. Keep in mind that you are working toward a specific goal and the sacrifices and extra effort required are a temporary situation to achieve a one-time goal. In the end it will be worth it to save the money you need as quickly as possible.
Once you have done this one time, you’ll have a track record of success to build upon the next time you need to save for a large purchase, if you want to build up your emergency fund, take a vacation without using a credit card, buy a new car with cash, start a college fund, or pay off your home mortgage early.