There’s an old adage that asks, “How do you eat an elephant?” The
answer: “One bite at a time!”
Saving for a big purchase can be a big challenge, whether
it’s a brand-new car, a hot tub — or even a 1959 Gibson Les Paul. But you can tackle your elephant-sized purchase with a similar strategy: Just
take it one step at a time.
Here are a few big-ticket budgeting tips that you won’t need a memory like
an elephant to remember to use.
1. Set a reasonable budget …
then pad it. It’s always wise to allow extra
room in your budget for contingencies. There can be unexpected surprises, especially
with larger purchases. And unfortunately, things often have a way of costing more than you expected. Consider allowing a minimum 10% overrun on your big-ticket budget.
2. Find discounts and take advantage of them. If you’re traveling, for
example, consider AAA or AARP discounts. Off-season travel can score you some savings, too. Many items
and experiences cost more depending on when you buy
or book them. Always look for coupons and other
saving options when paying for routine purchases such as oil changes for your car, grocery shopping, dining
out and ordering pizza.
3. Comparison shop. Scour the web and Google Shopping for other retailers who
offer the product or service you’re interested in. If you’re looking for a car,
for example, don’t assume that the price at your local dealer is “the” price. Edmunds.com, cars.com and other online resources
can provide options in your area that you can filter based on
your needs and preferences. And be sure to check
national franchises that can ship inventory from across the country to find the
4. Ask a “friend.” Crowdsourcing consumer opinions has never been easier. Most products
and services are reviewed, rated and compared — and
the results can be easily searched for online. Search the comments for
keywords like “discount,” “savings”
or “cost less” to see how others saved on
4. Set up a dedicated account. A great way to help organize your savings for a large purchase is to earmark the money intended for it by keeping the funds in a separate account. That way, you can more
easily track your progress — and you won’t be tempted to spend the money on anything else.
5. Boost your savings with
offsets. Take a look in your garage, the back of your closets and the attic. See if there are things of
value that you no longer use or want. Sell them
on eBay, Craigslist, OfferUp or at a yard sale. On the flip side, a penny
saved is a penny earned. Can you decrease nonessential spending until you reach your savings goal?
6. Put time on your side. Start saving as early as possible. If you wait until the last
minute, you may be faced
with having to do some pretty extreme saving. The sooner you start, the less you’ll feel the impact on your day-to-day budget.
Seek out Advice — and Save
friends and co-workers might
have their own experiences with the purchase you’re
about to make and can share how
they saved money on it. Ask for their advice — but also consider bringing in an expert by speaking with a financial professional who can help you make a
realistic, feasible plan for your purchase.