Whether you’re looking forward to that well-deserved dream vacation or looking to upgrade a part of your home, planning ahead can make all the difference in terms of budgeting.
Keep the following tips in mind:
Consider opening a new savings account for just that purchase
- Opening a special purpose account to save money for a specific purchase is a great idea. By setting aside this account for savings, you can choose to have money automatically withdrawn from a paycheck each month or only allow restricted access to it.
Determine the total cost of the purchase
How much will the purchase actually cost? Be sure to factor in price, taxes and other applicable charges. This cost can also be considered in savings, as saving for the purchase will likely take away from other payments.
Do the math
- Take the total amount needed to pay for the purchase and divide it by the amount being saved each month. This will determine how long you will need to save before being able to afford the total cost. Outlining a payment plan will ensure that all other required monthly payments will be met, while savings are also accrued. Use our Savings Calculator to determine how much you will need.
Understand how much you spend regularly
- How much are your monthly expenses? Keeping utility bills and coffee trips here and there in consideration will help establish how much you can then put away for savings. Deciding what costs to cut out during this time, such as date nights or buying lunch daily will help increase savings as well.
Remember to be patient
Saving for a large ticket item can seem daunting, especially at the beginning. Be patient and know that life events may occur during this time that can throw off a week or two of savings, but that doesn't mean you should give up!
If you need help determining the best method of savings for you, contact a Bethpage Federal Credit Union expert today!