Do you have a big purchase on the horizon? It could be a wedding, a special trip or even a downpayment on a home. Or, maybe it's time to upgrade your car or TV.
At first, the idea of making a major purchase can seem intimidating. However, it's much easier when you have a plan in place and save well in advance!
No matter what large expense you're expecting, here are a few steps to help you plan and save:
#1: Estimate how much you need
First things first, you need to understand how much money you need to save for your purchase. If you're saving up for a big-ticket item like a computer or car, it's easy to compare prices and set a savings goal. Planning for an event like a wedding or vacation can be a little trickier, since the costs may vary. With a little online research, you can get a good idea of how much you'll need to save.
#2: Set a savings timeline
Next, determine how much time you have to save for your purchase. If you're saving up for an event, you may need the funds on hand further in advance. For example, when planning a vacation, you'll want to have the money saved ahead of time to reserve a flight, rental car and lodging.
Once you know the total amount you need to save and a target savings date, you can work backwards and figure out how much money you need to put away per day, per week or per month to reach your savings goal. The more time you give yourself, the less you'll have to save all at once!
#3: Open a separate savings account
To stay organized, it's helpful to create separate accounts for your individual savings goals. Think about it: if your home fund is mixed with your travel fund, it's hard to see how much you have saved for each! It can also be tempting to dip into your emergency fund to pay for other expenses.
Keep the money you want to access easily in a high-yield savings account, like Wright-Patt Credit Union's (WPCU) TrueSaver® savings account or Money Market Account. For funds you don't need right away, consider a Share Certificate, which offers a guaranteed rate of return and flexible terms from 6 to 72 months.
#4: Automate your savings
One of the best ways to simplify your savings efforts is to put your savings on auto-pilot. You can use WPCU's Mobile and Online Banking to set up small automated transfers on a weekly or monthly basis. Or, try the “pay yourself first" strategy by scheduling automatic transfers that line up with your paydays. Treating your savings as a priority will help you stay accountable to reach your goal on time!
#5: Cut back a little to save a lot
Finally, keep in mind that reaching a big savings goal takes a lot of discipline. You may not realize it at the time, but small impulsive purchases such as take-out coffee and snacks can really add up!
Get insight into your current spending habits with WPCU's Money Management. This free, online tool allows you to see all your accounts in one place, with one login. Money Management even organizes your purchases by category so you can quickly identify the areas to cut back.
A good savings plan goes a long way!
What big purchases are on your wish list? Getting into the habit of planning and saving early will help you make those goals a reality—without needing to take on unnecessary debt.
For more great money management tips and tools, check out our helpful financial worksheets or browse our interactive learning modules with over 24 topics to help you Save Better, Borrow Smarter and Learn a Lot!