Whether you want to go on vacation, get that big screen TV, buy a boat or a new car, or anything other high dollar item, you will need to begin budgeting for that future purchase. In this edition of Personal Finance Resources, I want to give you some simple tips that you can implement to help you budget for a future purchase. Anybody that has a little bit of income can put aside enough money to buy most any one item they want, but the key is being disciplined and diligent to get there. And bottom line, you will have to WAIT. No…I said a dirty word…wait. The problem we face in America is our lack of patience, we have to have everything right now; there is no discipline or patience. This leads to debt, and more debt, and ultimately for many, bankruptcy. But let’s get into some of the simple ways of budgeting for a future purchase:
- Making small sacrifices to put back a little extra.
This is very hard to do. Not buying the coke at the vending machine, eating lunch at home or taking lunch to work/school, giving up vices (like smoking and drinking – it would be so much better for your body if you did this 🙂 ) and other small cut backs on a daily and weekly basis can create additional savings. I recommend every time you don’t buy that item, put the money into a jar or safe, and “pay” yourself for not giving in.
- Save early, and often.
Often we look for big things that we can cut or save in our budget. While it is great if you can find these things, you will usually have more success if you look for areas in your budget that small, and overlooked. Once found, create a saving schedule that is daily or weekly at the longest. The savings will become a habit, and seeing a nest egg building is fuel to help you continue to contribute to the fund.
- Have an accountability partner.
If you are married, use your spouse. If you are a child, ask your parents to keep you accountable. Anyone you trust. The point is to tell someone what you are trying to accomplish, and then have them “check in” on you to make sure you are doing. It may sound dumb or pointless, but I promise you, it works. It is all to easy to give up after a couple of hard weeks of sticking to the plan. An accountability partner will help you stay on track. Remember all those new year’s resolutions you made about losing weight? How long did you stick to your routine of working out? If you have a partner, it makes it a lot easier, trust me.
- And finally, invest the money while you are saving.
I wouldn’t invest in high risk investments, but merely put it into government bonds or a money market account. You don’t want to lose this money. Check with your bank about programs you can get into. If even a savings account, it will earn some money while you are working towards your goal.
Again, these are simple, but powerful techniques you can use to save money. If you don’t believe me, track every single expense that make in one month. Just try it for one month, I’m talking about every stick of gum you buy, every soft drink at the gas station, every candy bar, every bag of chips, every dinner out, everything. I think you will immediately see areas you can trim that will create extra money you can use towards your future purchase. Let me know how it goes, leave your comments at the bottom…