Saving for a big purchase can be difficult. The first thing most people do is check their bank statement to see how much money they have saved up.
They compare that to the amount they will need to cover the expense, and decide how much they can save each month. This is known as “saver’s math,” and it works well when you are saving for an item which you can afford comfortably each month.
Saving for a big purchase like a house or car, though is different because there won’t be enough money coming in from your regular income to cover all of the expenses at once; therefore, you must follow some important steps.
We’ve got five easy tips to help you with your big goal of saving:
1. Know What You’re Saving For
It’s easy to get in the habit of saving for a big purchase. You know you need to save for it, so you keep saving. It doesn’t take long before you realize that the savings are not nearly enough, and then you start to panic.
The best way to avoid this is to know what you are saving for. If you don’t have a specific goal in mind, then it’s hard to know when you need more savings.
In order to save better, you can start looking out for the best savings plans that will help you to grow your money by paying you interest on it. This will allow you to meet your goals faster than it usually would.
2. Set a Timeframe
If you’re saving for a big purchase, you need to set a timeframe. Decide how long it will take you to save the money and stick to it. If you don’t, your money might end up being used on something else or just not saved at all. This can cause stress, as well as make you feel like you’re not on track with your goal of saving for something big.
3. Start Small
The first step to saving for a big purchase is to start small. You don’t want to get overwhelmed and give up on your new goals. Instead, set a realistic amount of money that you can save to use toward the purchase.
For example: if you want to buy a car, set aside Rs.5000 to Rs.10,000 every month. This will allow you to save enough money for the down payment and monthly payments while still having fun with the money in your bank account.
Another way to save is by setting up automatic transfers from your checking account into a savings account. This way, you won’t even have to think about saving for a big purchase because it is done automatically!
4. Cut Excess Expenses
This may seem like the hardest part of the process, but it’s actually pretty easy once you get started. Look at each category of your monthly spending and see if anything can be eliminated or reduced.
For example, if you spend Rs.6000 on restaurants every month, try eating at home more often or switching to cheaper food options when possible. It could also be worth looking into some coupons, card offers, or discounts that can help lower your restaurant bill even further.
5. Take Advantage of Digital Savings Accounts
In the past, you might have had a savings account at your bank or at a broker. But those options are limited compared to digital savings accounts. Digital savings accounts offer far more flexibility than traditional accounts and allow you to save for a future big purchase with no fees or minimums.
Some banks even offer debit cards that give you an instant savings bonus when you make purchases with them. You also get paid high-interest rates for your savings which helps your money to grow efficiently.
See, saving money isn’t as hard as you might think. It just takes planning and a little bit of determination. When you are saving for a big purchase, it’s okay to take small steps each day towards that goal. If you make it a point to save a percentage of your income each month, it will add up in no time. So start saving now!
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