Episode 37: How to Budget a Large Purchase
The first step to planning ahead for any purchase is to create a budget. Make it simpler by budgeting each month, or even each paycheck. Record all your bills and expenses to get an idea of how much money is going in, and how much and where money is going out.
- Figure out your one year, five year, ten year, and etc. plans. If you’re interested in getting a new kitchen, a new fence, a new car paid with cash then you just need to plan ahead on when you want to purchase these items.
- Shop around for the best price on the item you’re interested in purchasing. Look for any deals or substitutions and beware of any scams.
- Divide the price of the item by how many months you’re willing to save towards that price. If you have 12 months to save for that vacation you want to take, then you’ll divide the total price of the vacation by 12. That’s the amount you need to save every month in order to make your purchase.
- And any found money, or money that wasn’t originally accounted for in your budget to your savings plan to get to your goal even faster. And remember, a big purchase shouldn’t be an emergency one. Quick, unexpected purchases come from your emergency fund. Big purchases can and should be planned for.
GHS is here to help with any questions concerning your accounts and managing your money goals! Stop in to a branch or call us if you need us at (800) 732-4447.