Are you saving up for a big expense like a new car, a wedding, or a trip overseas? Big purchases are exciting, but the cost can leave us with sticker shock.
It’s hard to save money when it means making changes in your life and sticking to a tight budget. But you don’t need to give up all your favorite hobbies to save money. There are simple ways to start saving extra cash for big expenses.
The first step is figuring out how much you need to save to make that big purchase and how long it will take. If you’re not happy with your current saving results, it’s time to make some changes.
No matter how much you need, you can save up for your goal with careful planning. Keep reading to learn to spend wisely, earn more money, and start saving for that dream goal.
Start Small
Have you ever heard of the 50/20/30 rule? Senator Elizabeth Warren explains the financial strategy in her book, dividing your income into three sections. 50 percent goes toward necessities like food, 20 percent goes to savings, and 30 percent goes toward wants and lifestyle choices like gym memberships or gourmet coffee drinks.
According to this rule, you should put 20 percent of your income towards your savings. However, this isn’t possible for everyone. If you can’t afford to put aside 20 percent of your income, start small and work your way up.
Even setting aside $50 or $100 a month helps you get closer to your large purchases.
Make a Plan and Stick to It
If you want to learn how to save cash, you should learn to make a plan and then stick to it. This plan can be different for everyone.
Maybe you need a detailed spreadsheet telling you how much you can spend each month to reach your goal. Or you might need a personal note from yourself, reminding you not to pull out your credit card.
Decide which method works best for you and then find some accountability buddies. These are people that help hold you accountable and make sure you don’t overspend. Involve your family by talking about which changes to expect and ask them for help.
Don’t have anyone to ask? Online dating is a great way to find some like-minded to help you out. Strike up a conversation on DoULike and ask to meet up for tips and advice.
Take a Break from Other Financial Goals
If you have a wishlist with more than one item, you need to prioritize. Decide what is most important to you right now and start saving for that.
For example, you might want a new TV, but if your car breaks down and you need a new one you would focus on the car. You can always save up for television later.
Other financial goals might include a savings account or retirement plan. If you spend some of your earned income on automatic investments, take a break. You can always return to these other goals afterward.
Pick Up Extra Work
This is the fastest way to save money since you have more than one income source. Ask for more hours at work or pick up an extra job on the side.
You can find local temporary jobs on sites like Craigslist or on certain Facebook groups. If you have a marketable skill, this is a good way to bring in extra money each month.
Looking for some ideas?
- Offer to paint rooms, houses, or fences
- Rent out equipment
- Tutor local kids
- House sit or pet sit
- Do yard work
- Market your skills on a gig economy website
- Become an Uber or Lyft driver
These are just a few ideas. You’re only limited by your imagination. You can also earn income by renting out an extra room in your house.
Adjust Your Budget
If you don’t know how to budget, now is the time to learn. The first step is to write down all your expenses and then fill out a budget tracker. You can find these online or at any office supply store.
Once you realize how much you spend each month, it’s easier to rein in unnecessary spending. This is a good time to make some lifestyle changes. For example, you can cut your cable or cancel your monthly subscriptions.
Another way you can save for a big purchase? Stop eating out so much and cook at home. On average, Americans spend $232 a month on meals outside the home. Think about how much you could save if you cut back on commercially prepared meals.
Stop Spending on Non-Essential Purchases
Every day we’re bombarded with ads that try to get us to buy more stuff. But do you need a new pair of shoes when you’re saving up for something important?
Make a list of essential items when you go shopping and stick to it. Don’t toss unnecessary items in your cart at the grocery store or start window shopping at the mall. A good way to stop yourself from buying non-essential stuff is to set aside a separate amount of money for your fun budget.
What’s a fun budget? This is money for non-essential items that you want like gourmet coffee or a nice steak dinner. Use cash for these items instead of a credit card. If you only take out a certain amount of cash for these items, you won’t be tempted to overspend.
Make Simple Changes to Save Money Faster
Depending on how soon you need the money for your dream purchases, you may need to make some lifestyle changes. But if you make these changes now, you’ll have enough money for the big ticket items you want sooner.
Learn to budget, stop unnecessary spending, and pick up extra jobs if you need them. Soon you’ll reach your goal no matter how much it costs.
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