Share this Article

Home / Articles / Big-Ticket Budgeting

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 best deal.

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 their purchases.

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

Family members, 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.