How to Save for Large Purchases
So you’re saving for retirement. Good for you!
You’re further in the game than a lot of people. But retirement’s probably not your only financial priority that requires saving. Buying a house, raising children, buying cars for your children, and paying for college for your children are just a few expenses you can expect along the way. Preparing for those purchases now can protect your finances from getting blindsided when the time comes. Here are a few steps you can take to start preparing for substantial purchases today.
Write down upcoming expenses and purchases.
Make a timeline of all your major, non-regular expenses. Determine how much they could cost, and then rank them in terms of urgency and importance. If it’s urgent and important–like saving for the delivery of a newborn–address it as soon as possible. If it’s important but less urgent–like toddler-proofing your home–schedule it for later.
Budget out how much you’ll need and start saving.
Once you have your priorities straightened out, figure out how much you’ll need to have saved and how much time you have available. Then, set up automatic deposits that put aside money for your savings goals.
Seek higher interest rates.
Saving for your purchases in accounts with higher interest rates can give your money the extra juice you need to crush your goals. That may mean opening a high-interest savings account with an online bank. But for some items, you might be able to find accounts specifically designed to help you. Meet with a licensed and qualified financial professional and see what options you have available!