Just a very small number of us can master money. Money seems to have a mind of its own once it finds its way into your pockets. It’s like it’s fighting to find its way out as quickly as possible. With our culture of compulsive consumerism, there is just so much to buy and too little money to fund it. That means we are always short of money and relying more on credit to fund our lifestyles.
Because of that, the vast majority of us struggle for years to make those big ticket purchases such as cars, holidays, gear, bitcoin mining rigs and other personal equipment even when we have a fairly good monthly income.
How can you successfully save for the finer and more expensive things in life and acquire them with some regularity? They add fulfilment or enjoyment to life and the acquisition of some is sometimes treated as a great life’s milestone.
Here is a simple strategy that you can follow to help you hit your saving milestones when you are planning to make those big-ticket purchases:-
To successfully save money for your big-ticket purchases, you need to start planning ahead. Depending on the scale of the purchase, ensure you allocate yourself sufficient time to pursue your savings milestones. Some purchases will require at least a few years of savings while other milestones can be met with just a few months of disciplined savings.
Once you have drawn your plans, make that milestone or goal part of your near or longer term financial plan.
Be Realistic about your expenses
Once you have planned and set a definite milestone, you need to be realistic about your expenses. If you know how much money is coming in and the amount that you are spending over a definite period of time, it will be easier for you to structure out your savings to meet your objectives. If you are going to make a big ticket purchase, you also need to be more disciplined and avoid impulse buying. Stick to the expected expenses.
Expand your sources of income
While you can finance your big ticket purchase from your existing inflows, sometimes you may also need a new income source to fill the gap. How well are your investments working for you so far? If they aren’t helping you meet your financial objectives, you may consider restructuring your investments to help you realize your financial goals.
Evaluate the liquidity and the capital stability and allocate the right amount of assets in an investment that will help you realize your financial goals within the required timeframe. This has got to do with the accessibility of money. A superannuation fund, for instance, may not be appropriate for short term saving strategies. For big short term purchases, you need an investment that allows you to access your money when you need it.
Maintain a diversified investment portfolio
To avoid potential shocks, work on maintaining a diversified investment portfolio. Take advantage of multiple opportunities for capital growth by allocating your money across diverse asset classes. That will shield you from potential financial shocks should one investment asset fail. It also helps put you on a stable course towards the realization of your money saving objectives.
Get a little creative with your savings
A single savings account for all your lifestyle dreams could suffice but if you really wish to laser-focus your money and effort towards the acquisition of a single item, you may need a dedicated savings account for the item. Having a dedicated account for your big-ticket purchases gives you a clear picture of where you stand as far as the goal is concerned and injects a sense of urgency and purpose into the money-saving effort.
Automate your savings
This is one of the most effective ways to stick to your savings goals. Unfortunately, very few of us have the willpower to get hold of money and direct it steadfastly towards the most prudent uses. Automating the savings eliminates the need to struggle with your willpower as you try to set aside money for your big ticket purchases. Once you have automated the savings and are deducting a specific amount from your pay check, you will soon learn to do with the little that is left and your savings will grow exponentially “in the background”.
The big ticket purchases are possible. You don’t have to get a financial windfall to acquire a dream object. With careful and patient planning and discipline, it is possible to set and meet realistic financial targets. It is also important to set aside a realistic deadline to come up with the money. If it is going to cost you a lot of money, you will obviously need a lot more time. Setting short unrealistic deadlines is likely to put you under too much financial pressure that may end up being counterproductive. Master lifestyle costing and your big dreams will be within reach.