If you are determined to save money toward a specific goal, the first step is to decide in a concrete way how much money you are really talking about.
Write down what it is you want. Then begin the process by doing some comparison shopping for the item you have in mind. Don’t forget the costs of delivery, registration, installation, shipping, insurance and possible sub-charges. Let the bottom line contain every possible element that will play into the final cost.
For instance: you want a new refrigerator, complete with ice-maker and plenty of extra freezer space. That’s the easy part, but the hard figure – what it really will cost – is the one you need to get planted in your mind.
If you intend to finance a big-ticket purchase, consider what amount you want to pay down and then realistically figure what your payments will be. A large down payment might require a longer savings period, but result in smaller installment payments. Make it work for your particular budget.
If you want to save enough to buy your item outright, say the fancy new refrigerator, and have all the costs totaled, look at the total (probably about $1,500) and then begin to set money aside. Don’t just expect that you will have $50 or so to add to the pot now and again. Develop a savings schedule that is reasonable and stick with it.
If you want to have the new fridge in six months, that means you must save $250 per month to meet the total. If you need more time, create a nine-month schedule that calls for $167 per month. You might want to divide that between two paychecks per month, or $84 per whack.
Some people find it hard to actually stick with the agenda they have set. It’s always possible to find something you want or think you need more than putting the money into your account and leaving it alone. That’s when it might be a good idea to open a dedicated savings account that is not linked with your checking account or any account that has an ATM card. Then have the amount you have settled on automatically transferred from your checking account to that savings account on a regular basis.
That’s the set-it-and-forget-it approach and, according to the experts, it’s the best way to achieve a specific savings goal. Before you know it, you’ll be sipping lemonade made cool with ice from your new fancy refrigerator – or enjoying whatever it is you set out to save for just a short time ago.