By Vanessa B
Saving up for something big like a deposit on a house or a blow-out holiday can seem impossible, especially if you’re only just able to start saving instead of living month to month. However, like any other big challenge in life, saving for a big purchase is doable. You just have to manage it one step at a time.
How Much Do You Need?
To kickstart your savings, you first need to create a budget to get you to your goal. How much money do you need to get what you want?
Some large purchases are easy to work out the price of. For example, if you want a specific model of car, you can do research to work out the average cost, and what help you might be able to get, such as car finance. You can also find information about the cost of running and maintaining the car.
Working out how much you need to budget for things like a big trip might be harder to estimate. The cost will depend on where you stay, how much you spend on flights, and how much you want to have as spending money while you’re there.
There might be other costs that you have to take into account for your savings too. For example, if you’re planning a long holiday, but have pets at home, you will need to include the costs of boarding in your budget. If you need to renew your passport or buy new luggage, you will need to find the money for those as well.
If you know someone who has recently made a similar purchase to the one that you are hoping to make, you could ask for their help to draft a realistic budget. Write down everything that you’re including in your budget, and ask your friend if you’ve missed anything. Some research can also help you to remember everything that you will need to include in your total.
When Do You Need It By?
When you know how much you need to save, set a due date to save it by. This will help you to work out how much you will need to save per day, per week, or per pay cheque to actually reach your savings goal.
Make sure you think through when you will actually need the money. This might be different from the date you actually plan on doing the goal. For example, if you’re saving for a holiday, you will probably need to buy your flights, or pay in advance for other parts of the trip. If that’s the case, set your ‘due date’ for your goal for when you expect to make those purchases, instead of when you actually plan to leave for your trip.
How Will You Fund Your Goal?
The best way to save for something is to save automatically. If you have the room in your budget, set up an automatic deposit into your savings account for as soon as you get paid. You’ll be able to save without thinking about it!