Saving like all other decisions in life that can add value to your life isn’t a walk in the park for most people. But with adequate planning and consistent effort, you can easily succeed. Whether you want to buy a car, a home appliance or any other big purchase, it’s important that you plan well before diving in.

Can you afford it?

When most people are contemplating about getting a house or a dream car, it’s easy to overlook your financial status. Normally, you visit your banker and after once glance at your gross income, they conclude that you can qualify for a $300,000 loan. Because you are enthusiastic about owning that beautiful home or the flashy car, you quickly give your consent for the loan assuming that you can handle the payments.

What the banker has overlooked are the various financial obligations that you need to handle on a monthly basis. This is what makes most people get into a financial turmoil because your finances get overstretched.

However, most buyers make emotional decisions on obligations they can’t comfortably handle. To avoid financial difficulties, it’s better to consider your entire financial status before making any commitments.

Consider saving a down payment

You can circumvent the problems caused by taking a personal loan that is bigger than your financial capability by saving up a sizable down payment. You only need to develop and follow an affordable and smart savings plan to accumulate the down payment and ensure that the subsequent monthly payments will be bearable.

For instance, if you intend to purchase a home and you are currently living in a rental for about $600, you need to find how much monthly payments you’ll be making towards your house purchase. For a house requiring less than $1200 in monthly payments, try to put the extra $600 in a savings account.

This should go on for about 12 months and within this time; you should be having a clear picture of whether you’ll afford the $1200 monthly payments. In the event where you realize that putting away the extra $600 is too much for you, it’s time you considered a cheaper house if you don’t want to wait any longer.

While most people don’t save money for a car down payment, you can avoid the higher monthly payments as well as save money on the interest rates. To illustrate, assume you want to purchase a car worth $20,000 and borrow the whole amount, you will have to pay about $434 per month for two years if the interest is 1.99%. Instead, you can start by saving the $430 dollars, which would translate to $5220 after one year. You’ll be only paying about $320 in monthly payments for 48 months.

The advantage here is that you are already used to paying the $430 per month and therefore it would be easy to handle $320.

Research your intended purchase and create a budget to facilitate the savings

Before you even start saving money for a big ticket purchase, you should find out as much information as possible. Being savvy can help you learn about better deals that you can take advantage of. You can compare prices and discounts from different vendors to determine who is best to work with.

With a definite figure in mind, you can plan your savings around the time you have left before the date making the purchase. Determine how much money you need to save each month so that you can accomplish your goal within the available time. Breaking down the amount into smaller chunks makes it easier to handle and keeps you motivated.

Your budget should be modeled on the required cash and you should look for ways to free up some money that can be put towards the savings account. Until you achieve your goal, you should cut back on any unnecessary expenses that can compromise your savings goal.

Automate your savings plan

Whether you have multiple streams of income or you depend on a single paycheck, you can automate your savings towards a big purchase. The beauty of this trick is that it completely eliminates the need for constant willpower to carry on with the savings goal.

Set up your account so that the amounts that you had earlier decided upon are automatically deposited into the savings account. This works well even when you are an impulse buyer and you are not certain that you can keep off some cravings. Before you get your paycheck, the money will already be in your account and you won’t have to worry about self-sabotage.

Create some extra income to achieve the saving goal faster

If you already have more than one channel of income, it would work towards your best interest if you dedicated some extra income to the savings goal. But if you only have one income stream, it’s possible to generate more income by taking a part-time job.

In addition, you can sell items that are lying idle in your home if you no longer need them. If you realize that you haven’t used an item in your home for about four months, you can comfortably sell it. If you have any specific skills, you can monetize by offering the services to people. For instance, if you are a college graduate it’s possible to offer tutoring services just as you would take guitar students if you had the skills. If you don’t know where to begin, the internet is teeming with lucrative opportunities to earn some extra dollars. However, you also need to be cautious of the online scams to avoid frustrations.

The idea here is to create an extra source of income that can go towards your current financial goal.

Be creative

When you decide to make a big purchase, it’s important to determine the exact time that you have before the acquiring it. A well-planned goal with specific times frame helps you to act with focus which facilitates its attainment.

Although successfully saving the entire amount needed for a big purchase calls for perseverance, patience, and commitment, it is a rewarding decision. At times, you may feel burdened by the goal but with a little focus and motivation, you can accomplish the goal.