[ad_1]
If you are thinking about a major purchase that you would like to make, there are many ways to make your dream come true while saving. Here are four tips to help you reach your financial goal so you can make that big purchase.
Set yourself SMART goals
The SMART goal methodology (specific, measurable, achievable, realistic, time bound) can be applied to most of the goals you hope to achieve. However, it can be especially useful for goals that you have related to your finances. Think of this as the basis of building your toolbox to achieve your big buying goal. Using the example of buying your dream car, here is an example of use:
Specific |
I want the new “Dream Car” |
Find the exact item you are going to purchase. |
Measurable |
It costs $ 76,450.30 |
Calculate all costs associated with the purchase, including taxes, fees, insurance, etc. |
Feasible |
I can buy it from the dealership down the street |
Your purchase must be feasible within the limits of reality |
Realistic |
I have reviewed my finances and can reasonably save for this purchase |
This will be determined by personal factors, including your current financial situation |
Limited time |
I plan to make this big purchase in a year |
With all of the above in mind, set a realistic “timer” to establish a sense of urgency |
This tool can be used to help you achieve any financial goal you may have, including save for a house, wedding, vacation Where retirement. Once you’ve written your SMART goal, make sure it’s placed somewhere you’ll see it to motivate your spending and saving habits accordingly.
Open a dedicated savings account
When money is readily available, you are more likely to spend it without a second thought. That’s why it’s important to have a dedicated savings account for your big purchase. With a separate savings account, you can set up automatic direct deposit of your paycheck so you don’t have to visit the account and be tempted to withdraw money for other expenses. Additionally, you can increase your success by opening a savings account at a bank separate from your main bank. Keeping your savings as “out of sight, out of sight” as possible is a healthy recipe for saving money fast.
Any purchase outside of the normal range of what is needed for you to be able to live comfortably will simply put you further back from your goal. Examining your finances for subscription services you no longer need or cutting back on entertainment expenses are examples of avoiding unnecessary purchases in small ways. It’s also important to avoid other major purchases as you work towards your current major purchase goal. Set a big financial goal to both help you stay focused and keep the momentum going on your money-saving journey.
Pass on plastic
Credit cards and digital wallets make spending money fast and easy, which can prevent you from saving for your big purchase. A study by MIT found that sometimes credit cards cost up to 83% more?? money than if they used cash. So, try to limit your online and credit card spending only when necessary (eg paying bills, emergencies, etc.). Freezing or suspending your credit card may also remind you to pay cash. You can also hide your card in a safe place in your home to ward off temptation. If you are concerned about keeping track of certain payments, write a check linked to an account that is not linked to your savings from large purchases.
With the help of these and other personal finance tools, you’ll be on your way to saving for any major purchase you have in mind. If you need additional help, a financial advisor can also help you reach these and other long-term savings goals.
Boost your financial know-how! Subscribe to our personal banking newsletter and visit the UMB Financial Education Centerfor insightful articles and resources.UMB personal bank The solutions provide convenience and simplicity to meet all of your past, present and future financial needs. Of mortgage loans To automobile financing and everything in between, see how UMB Personal Banking can work with you to find the right products for your life and lifestyle.
When you click on links marked with the ââ¡â symbol, you will be leaving the UMB website and accessing websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services that you may view on other sites. Other websites may not follow the same privacy policies and security procedures as UMB, so please review their policies and procedures carefully.
Disclaimer
UMB Financial Company published this content on November 16, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on November 16, 2021 02:16:08 PM UTC.
[ad_2]