Saving for a large purchase or expense, like a new couch or a trip, may not be too difficult to save for with enough time and planning. Larger expenses, like a down payment on a house or the cost of a new car, aren’t always as easy to save for. They typically require a lifestyle or budgeting change and a few extra years before you’re able to save the full amount. No matter what you’re saving for, with the right perseverance, planning for your purchase using a few of the tips below should help you meet your goal.
Determine How You Save the Best
There are tips and tricks to reach savings goals that work wonders for one person, but they may not always be helpful to someone else. The trick is to keep trying. Keep trying new methods or habits until you find the one that works perfectly for you. If you have the resources available to plan and save for your purchase, here are some options on how to save for it.
Open a Separate Savings Account for Your Intended Purchase
There are plenty of savings accounts out there to choose from, and many of them offer high yields. As long as the company is reputable and their benefits and tools will help you reach your goal, you don’t need to overthink which savings account to open. The important part is having a separate account or using a third-party tool to record your progress toward your savings goals.
One savings account company that can help you achieve your savings goals is BoostUp, and it’s part of the Quicken Loans Family of Companies. With options like automation and crowdfunding, BoostUp is a free tool that helps you reach your savings goal for large purchases.
Deposit Daily Small Amounts into Your Savings
Another benefit of using BoostUp is because you have the ability to send small amounts into your savings every day. Whether it’s a buck or $10 a day, you can choose any amount you’d like and automate your savings – so you’re always saving without realizing it.
Pay Less by Buying Used
Another great option for saving is to buy used, online or in a thrift store. Some great options for buying used and saving cash are eBay, the Facebook Marketplace and your local thrift store.
Purchasing Power
Buying in bulk isn’t just for extreme coupon-ers. If you have the space, planning ahead by purchasing items in bulk that you use on a daily or weekly basis could help you save in the long run. Before purchasing the item in bulk, compare your savings and make sure it’s non-perishable so you don’t end up wasting the extra goods. Some items you could buy that may help you save are trash bags, shampoo, dry foods, toothpaste and office supplies.
Make a List Before Shopping to Avoid Impulse Buys
As someone who likes to explore a store for hours on end, this one is tough for me – but it also has been one of the best ways that I’m able to keep up with my savings goals. I never write generic lists like “snacks,” “sandwich stuff” or “lunches,” either. Doing that is almost worse for me than wandering around a store without a list because I feel like any purchase related to those categories is justified. Instead, I specify the ingredient, brand, item and quantity so I never end up spending more than I set out to.
Purchase Generic Brands
If you frequent popular chain stores, you’ve probably seen their generic branded items sitting right next to the item/brand you’re used to getting. I’ll read anything and everything on a label, and there is rarely a difference in the products once you look under the packaging. So if you want to save a few extra bucks with every daily purchase you make, consider buying generic.
Comparison Shop Online
Out of all of the tips listed here, this has been the one that has worked the best for me. Recently, I had been at a popular sporting goods store looking for an outdoor rain jacket when I had found a jacket with the best fit as well as high-quality material.
While still in the store, I did a quick search online and found the jacket in the identical color, brand, size and style elsewhere. The difference: $60. I took a picture of the tag, and when I got home did a little more researching online. I was able to sign up for the company’s newsletter in exchange for free, two-day shipping on my first purchase. I bought the jacket online and didn’t have to wait much longer for the purchase to arrive and was able to put away an extra $60.
Refresh Your Budget
Not all of these tips will work for everyone, but there is likely a tip or two that will work great for you. If you want to advance your savings even more, consider freelancing for a few hours on the side if you have the time or reselling everything you haven’t used in the past few years. Once you have a system in place that works for you, you can use your favorite budgeting tool to track your savings and have enough for your large purchase before you know it.
Financing Your Purchase With a Personal Loan
It’s not always feasible to pay for a purchase in full – especially if your need for the item arises from an unforeseen emergency. If you don’t have time to save or if the expense comes unexpectedly, you have another option – a personal loan.
Personal loans are convenient ways to pay for large expenses without wiping out your savings account, and you can get approved for one completely online. With RocketLoans, you can have anywhere from $2,000 – $35,000 deposited into your bank account in as little as one day. (In some cases, depending on the amount and time you close, as soon as the same business day.)
Using a personal loan to finance your large purchase might be the right option for you.
Get an Interest Rate Lower Than What Your Credit Card Offers
You could qualify for a lower rate with a personal loan, so you should always look at all of your options to see if a credit card or a personal loan makes the most sense for your financial goals. Unlike personal loans, credit cards use revolving credit. When you use more of your revolving credit line, your utilization rate increases. Your utilization, along with your payment history and your length of borrowing history, is one of the main factors that influence your credit score. Based on your specific qualifications, a personal loan might be the right choice for both your wallet and your credit score.
Manage Your Debt
Personal loans have fixed terms, so you’ll know when your last payment will be, and you’ll know what the total cost of your loan is. Personal loans help you set manageable payment goals, which can help you save time and interest compared to making your large purchase with a credit card. Credit cards often only require you to make a minimum payment of 1 – 3% of your balance. Although this might look like a better deal at first glance, you’ll end up paying more in total interest if you stick to making just the minimum payment.
Whether you choose to save up for a big purchase or choose to borrow a personal loan, you can be confident in your finances by keeping these tips in mind. Do you have any additional saving tips that have worked well for you? Let us know in the comments below!
The post The Best Way to Finance or Save for a Large Purchase appeared first on ZING Blog by Quicken Loans.
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