Saving for big purchases can feel impossible. Day to day expenses often eat up any extra savings you may have managed to squirrel away. If you need help thinking of ideas to help you meet your big purchase savings goals, here are a few.
Identify the Purchase
With any goal, it helps to be specific. The more specific you are, the easier it is for you to figure out how you’re going to make it a reality. Start by identifying the exact purchase you would like to save up for. Next, do research and find out precisely how much it’s going to cost. Once you have that number, break the large amount down into increments. Set dates in which you need to meet those increments. This breakdown will make a large number seem a lot more manageable. Whether you save quickly or take years, it doesn’t matter. Set numbers that are attainable and do what you have to in order to get money in your savings. It takes a lot of self-discipline to save for large purchases, but the reward is sweet!
Invest your Money
Make your money work for you by investing it. If you’re saving up to purchase something in the next 2-3 years, put your money in a high yield savings account. This will accrue interest without you having to do anything. The amount of money you’ll make will depend on the interest rate. That number can be unpredictable and your dividends are dependent on it. If you’re looking for a more consistent, dependable strategy, consider putting money into a mutual fund. These types of accounts usually have a higher rate of return than the average savings or money market account.
Start Small
How do you eat an elephant? One bite at a time. This is applicable to saving for large purchases. A little bit of money set aside each week or month will add up to a significant amount over time. An article written for wsfsbank.com states, “Start small — even if it’s $50 or $100 per month. Just like with exercise, saving only a little is better than saving nothing at all, and you’re much more likely to keep saving if you set small, achievable goals.”
Start a Change Jar
Think of unconventional ways to save money. A change jar is a great example of something you can do to make sure you’re saving every penny (literally). Change is easy to forget about. Chances are you have some hiding in various places around your house. Check under your couch cushions, junk drawer, and in your laundry room. Additionally, check your car to make sure there isn’t any change floating around. Set it in a communal space in your house to remind your family to contribute their change as well. Every little bit helps and it’s important to work together.
Saving for large purchases doesn’t have to be overwhelming. Remember, a little at a time adds up to something big.