There isn’t much planning to be done when a sudden unexpected expense happens. We might just turn to cash advances or credit cards to get us through the unhappy surprise. Though it isn’t always the best option, cash advances and credit cards offer a little relief for our wallet by giving us the chance to spread out repayments when otherwise you’d be forking over a large chunk of change.
When it comes to expensive purchases you know are on their way, relying on cash advances is still an option – but there are others. Such as, saving! It’s tough to do, but with a little help, you can properly prepare for your buying future.
Start from the top: What kind of plan works for your budget?
Not everyone can save the same amount of money every single day – but you can’t have a plan without a final dollar amount in mind, so let’s start at the end and work our way backwards. Here’s how it works:
- Determine the number of days from today until the day of the big purchase.
- Divide the total purchase cost (including potential taxes and fees) by the number of days remaining.
Let’s look at an example:
Couch Purchase: $900 total
Date of Purchase: 1 month, roughly 30 days
900 divided by 30
You need to save around $30 / day to reach your goal
Saving $30 a day may seem like a lot – or it may be a cakewalk. Either way, be realistic and adjust your goal date to better work with your budget. You might need more time and that’s okay. The real point here is to figure out what is doable for you.
If the goal date is fixed, then it’s time to look at other opportunities to save.
Can you cut back in other areas?
Recent reports say that the average American spends over $20 a week on coffee and another $37 eating out instead of packing a lunch. That’s around $60 per week spent on filling up and well over $200 each month.
By making coffee at home, you’re looking at an average cost of anywhere between 11 cents a cup to $1.80 a cup for the good stuff. Average that out to 95 cents a cup, three cups a day, and you’re saving a minimum of $7 a day – just on coffee!
Let’s look at your grocery budget. If you stopped eating out and packed your lunch every day, you could end up only paying $20 per week. That saves you almost $70 a month. But what if you aren’t the best cook? Look for less expensive, healthier food options like store-bought meals that don’t require you to know anything more than how to press a few buttons on the microwave. If you already eat most of your food from home – there’s still a solution for you! Look for this week’s coupons at a grocery store near you and plan your week’s grocery list in part based on what’s on sale.
Another way to save is to take a close look at last month’s purchases, either via online banking or your paper statements. It might be scary but it will give you a very good idea where you might have some room to scale back. That, and a little education on how to avoid overspending, will help you find savings in places you never knew before.
Get creative: Can you save on the actual purchase?
Saving on the purchase item depends on what it is you’re buying, but there are opportunities lurking around every corner. Coupons or shopping when there are deals is a great option to start saving. A good next step is to investigate used options; electronics, appliances, almost anything, really, can be bought used. Besides the usual Craigslist and eBay, here are just a few places to start:
- Used Items Storefront on Amazon
- Habitat for Humanity ReStore
- OfferUp with Shipping
- National Garage Sale Search Site
There are also ways to save on services, like household repairs. Finding the right contractor or company for the job you need done can end up saving you more than just spare change. There are a lot of services out there, but a good place to start is HomeAdvisors.com. You can find a qualified pro and get quotes from multiple sources to help bring down the costs.
Taking out a cash advance or loan for your purchase is also an option, but there may also be low-to-no interest payment plans available on the product you need to buy. One is the rent-to-own approach but beware: Final costs could be significantly higher than the price tag and may not be worth it. Just get informed on all the fees before making a decision. Here’s where you can start:
You can also check with local companies to see if there are cheaper options available, such as buying the display model or last year’s inventory they want to get rid of. Some stores will even give you a discount if you pay using cash rather than a card. And don’t forget about coupons. You can save money on big ticket items by using coupons.
How do you stay on track with your savings plan?
The biggest question of them all: how do you keep up with your savings plan? Staying the savings course takes instilling just a few habits.
One key to keeping up with savings is by storing your money in a way that makes it almost impossible to spend before your purchase date. There are dozens of savings account options, from your local bank to international online banks. You could choose one that penalizes you for withdrawals to help eliminate the temptation of using it before you need to. If you have a longer period of time before your purchase date, you might even consider a Money Market account; you’ll get higher yields than a savings account but you need to have a higher balance to start out with.
No matter where you put your money, make sure that you look at all your financial and savings options before making major decisions.
Finally, a surefire way to stay on track with your savings is through simple budgeting. Creating a budget one time will not only help you figure out what your expenses are each week (like rent, food, utilities, prescriptions, cell phone), it will tell you how much leftover income you have. All you have to do after that is set aside a weekly spending budget in cash and once you spend it all, that’s it. You might even leave the debit or credit cards at home to avoid temptation.
All this hard work does have one big payoff, besides, of course, saving for your purchase. It makes you feel great! If that time does come that you need some help in getting extra cash, LendNation is here to help you with every financial surprise with a title loan, installment loan or payday loan.