How To Save For A Big Purchase
Step 1 Be Realistic
Its important to not allow your financial goals to overwhelm you. Making a big purchase, whether it be for a home, a holiday, renovations, or simply birthday gift for a loved one, shouldnt be something that affects your long term finances too dramatically.
For example, if you are looking at buying a house, you should avoid going for your dream property with the high price tag. Not only will this take you an exceptionally long time to save for the deposit should you be in a low income bracket, but the high repayments will undoubtedly affect your lifestyle.
Look at Your Budget
When reviewing your monthly outgoings, youll be surprised to see just how much money can be saved. Little things like a daily coffee from your favourite cafe on the way to work, buying your lunches, or eating out at night can all add up to hundreds of dollars on a monthly basis.
Therefore, its important to cut these expenses out, even if it is just for the period leading up to the big purchase you are saving for. If you feel as though you cannot completely stop doing some of these things, make it a special treat once a week.
Find a Good Savings Account
While you may already have a savings account open with your current bank, you may not be earning the most interest available, in comparison to what other institutions are offering. Your best option is to start by going online and researching what the current interest rates are on savings accounts. Look at all of the banks and what they have available, not only with normal savings accounts, but also with term deposits.
A term deposit essentially locks away your money for a period of time which you nominate (from one month to five years) and because you cannot touch these funds until that time period is up, the bank will usually offer a high rate of interest.
The only thing to remember is that if you are unsure of whether you may need access to the funds very quickly, then a term deposit may not be the way to go. This is simply because you will be charged a hefty fee should you access your funds in the term deposit before the time period is up.
Pretend the Money Was Never There
Lastly, if you are making regular deposits into your savings account (which is highly recommended) make sure they get taken out on the same day you get paid. That way, youll never have the opportunity to see the money in your everyday transaction account which will take away the temptation to spend it.
by: Ruth Carter
Eliminate Unsecured Debt Quickly Do You Have Large Amounts Of Debt? Considering Blue Ray Disc Price Before Making A Purchase Get Out Of Debt Quickly Objective Of Everyone Covered Up In Debt What A Factor Looks For To Finance Invoices And/or Purchase Orders How To Get Out Of Debt In 2010 Don't Be Fooled By Common Debt Help Myths Is Bad Debt Making You Nervous? How To Avoid Being Buried In Consumer Debt Debt Settlement: The Revolution In Debt Help Collection Agency Basics Part Six: Advice For Debtors Debt Collection Basics: Part Seven Why Should You Purchase And Wear An Undershirt?