Making a Major Purchase? Follow These Budget Tips
Deciding to make a major purchase is often an exciting new venture for consumers, though the definition is usually tailored to their unique needs and financial goals. A major purchase is a family vacation, and for others, it’s a new car or a substantial home renovation project.
A significant purchase requires significant savings at the end of the day, no matter what the term means to you and your family. To ensure this purchase doesn’t negatively affect the rest of your finances, having a financial plan in place is the most effective way to secure the item you’re after without sacrificing your overall budget.
If a major purchase is in your sights, follow these budget tips to help ensure you’re in the best possible position.
New Isn’t Always Better
Before you run to purchase that brand new vehicle or the newly renovated dream home, consider researching the costs of gently-used items or that home that needs a homeowner’s touch. Buying new is undoubtedly exciting since no one has owned it before you, but that means it often comes with a higher price tag.
In the case of big-ticket items like furniture, visit the secondhand shops in your area for unexpected finds. If you’re shopping for a car, visit a handful of used dealerships and gather quotes on the vehicles you’re interested in — the more information you have at your disposal, the more informed decision you’ll make when it comes to spending a significant amount of money.
Know Your Lending Options
While it’s essential to know how to budget on your own, in some instances, you may need to look for alternative lending options to help you secure a significant purchase. Traditional lenders can be tricky to navigate when it comes to obtaining money efficiently and conveniently. Homeowners, in particular, look to alternative lenders like GoDay to secure the immediate cash they need when their furnace breaks down or there’s a leak in their plumbing that needs to be addressed.
In other cases, a temporary loan allows consumers to get ahead on those car payments, so they can calibrate their budget to take care of the rest. Speaking with an alternative lender or researching virtually should provide you with the information you need to make an informed decision — one that will benefit your financial situation long term.
Set Up a Separate Savings Account
During the planning stages of any significant purchase, having a designated savings account is the simplest way to ensure your money is where it should be. If you’re keeping your savings mixed with your everyday expenses, chances are you’ll end up spending those funds before you’re able to use them for their original purpose.
Open a savings account dedicated to important, substantial purchases — whether it’s your designated vacation fund or it’s used to implement major renovations in and around your home. If you want to take it a step further, set up an automated payment plan. This takes a set amount of money and automatically transfers it into your savings account, so you never have to worry and can focus on the other aspects of your monthly budget.