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Saving Money for Big-Ticket Items (with Free Savings Goal Calculator)

/6 Comments/in , /by Mary Hunt

Dealing with unexpected expenses or saving money up for big-ticket items like a new car can disrupt even the best-laid financial plans. But don’t sweat it! I’ve got your back on tackling those big-ticket items like a pro. Let’s jump in and take control of your finances together!

dream car saving money big ticket purchase in front of midcentury modern home

Picture this: You’re cruising through a couple of smooth-sailing months. Bills are getting paid on time, and you’re even left with a bit of extra cash at month’s end. Then, BAM! Out of nowhere, your water heater decides to call it quits, your car throws in the towel, and to top it off, that property tax bill demands immediate attention. Suddenly, you’re broke.

How can you possibly plan or save for big-ticket items? Many people believe it just can’t be done, that they have no choice but to rely on their credit cards to cover the cost of emergencies—whether it’s something they should have known was coming or not.

There is a way out: Anticipate. You know they’re coming, so get prepared! Divide the price tag on that big-ticket item into small pieces then make it as routine as paying the phone bill.

Define the Goal

The crucial first step? Pinpointing your next big-money obstacle. It might be lurking just around the corner, catching you off guard. Perhaps a big dental bill coming down the pike. Is your car starting to show its age?

Let’s say your refrigerator is acting up. At 7 years old, you’ll be lucky to get three more years out of it. Knowing this gives you something valuable: time. Time to start researching and saving.

What style and size do you need? About how much will it cost? Are there options you should consider? Brands you should avoid? Look into it now so you’re ready when it fails.

Identify Terms

Let’s crunch the numbers. If you start saving for the refrigerator right now, you’ll have about 36 months. You determine the cost will be about $1,800. Divide that amount by the term of 36 months. The result is about $44. You’ll need to save $44 each month, starting now. By the time those three years roll around, you’ll be ready to bid farewell to your old fridge with cash in hand for a shiny new replacement.

Keep in Mind

Looking to save up for those big-ticket items? This free Short Term Savings Calculator offers an easy way to calculate how long it will take to save for your big ticket items using terms that work best for you.

Source: Bank of America

Make it Smaller

Cut your goal into smaller payments that are psychologically easier to handle. Instead of 36 months, divide the cost of the refrigerator by 156 weeks. With this slight change in terms, you need to save only $10.26 each week to reach your goal.

Make it Predictable

Treat this savings goal like a regular bill—a non-negotiable expense that’s due each month, or even each week. Consistency is key–it will soon become as ordinary and predictable as your mortgage or car payment.

Create an Account

Don’t keep this stash in a drawer or your bank account. That puts the money within easy reach and makes it too available for you to borrow for some other purpose.

Instead, create a savings account specifically for your big-ticket goal. Check out SmartyPig.com, a fabulous online FDIC-insured savings bank that makes saving easy and fun. An account is free, and there are no fees or minimum balance requirements.

Make it Automatic

Set up an automatic savings plan to transfer money from your regular household account to your Smarty Pig regularly. By automating this process, you ensure that your savings grow consistently and effortlessly.

Keep Your Eye on the Prize

Stay focused by finding a picture of the item. Post it where you’ll see it often. This will go a long way in motivating you. For an added boost, get creative and draw a grid over the picture with a pen and ruler so you have the same number of squares as the payments you’ll make. After each payment, fill in a space on the grid with a highlighter, watching your progress unfold before your eyes. No time for arts and crafts projects? Download and print this free savings tracker to kickstart your savings journey.

freebie downloadable printable everyday cheapskate savings trackers

Give it a Boost

Look for new ways and frugal choices that will result in money you can use to reach your goal even faster. What money did you save on groceries this week? Use it as an extra payment. The loose change in a jar on your dresser? Use that, too.

One Goal at a Time

You’re probably thinking about several savings goals you want to work on simultaneously. I understand your enthusiasm, but I know from experience that it’s best to start slowly. Prioritize tackling one goal at a time. If you have additional funds, use them to reach this goal before starting on another.

In time, as you become adept at managing big money decisions, you’ll be able to handle several at once.

 

What’s the biggest unexpected expense you’ve faced, and how did you handle it? Let’s chat about it in the comments!

 

 

 

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6 replies
  1. Lynne S says:

    My car is now 6 years old. I bought it a little before I had planned, so had to take out a small loan that I paid off in one year. Since then I’ve been putting $500 per month in an account, just as if I had a car payment. My wonderful car is still going strong with regular preventive maintenance and I have $30K in the bank, and growing, to replace the car when the time comes. It also helps that I view my car as transportation, not a statement of my status, so the amount I have saved will completely cover a new car when the time comes.

    Reply
  2. Arthur Mantzouris says:

    I’m right now saving for my next car. I’m saving enough every month for any expenses that may come up now or the future…

    I like that fact fhat my car now that I paid all cash is in tip top shape which is a true blessing….I’m only saving for anything that may come up for it now which will be a oil change in fhe future….But other than that there isn’t any major problems with it….

    So I’m counting my blessings and putting my plans in God’s hands as he says in Proverbs 16:3 n Psalm 37:5 says……

    Reply
  3. Linda Radosevich says:

    We recently had our car’s engine fail…yep, all the idiot lights on at the same time! It’s an old car (1998 Toyota Avalon) but I love it. I’d decided long ago that if (when) something happened to it, I would fix it, if possible. My husband’s IRA is our piggy bank. I was able to replace the engine for less than half of what a small used car would have cost. The new engine came with a three-year or 36 month warranty.

    Reply
  4. Pat C says:

    Something else that’s useful besides of course saving up, is to know what you’re going to buy when the time comes. Because if something breaks down, especially crucial and expensive things like cars, furnaces, or major appliances, you won’t have the time to look at the various models and their options at several different stores and decide which is the best for you while your food is rapidly defrosting/going bad in your fridge, or your house temperature is dropping rapidly. And sales people can smell desperation and will steer you to the most expensive option. As our fridge aged, my husband and I spent time at the big box stores, looking at the various possible replacements and when it started to make awful noises, we knew which was the best for us and we were able to order it, much to the chagrin of the sales person who wanted us to consider much more expensive models. I had not done that when my washer decided to emulate the lilies of the field (It toileth not neither did it spin). But at least I could go to a laundromat while I considered which was the best model. And of course if your furnace quits in the middle of winter, you’re stuck with whatever’s on the truck which is bound to be far bigger and more expensive than you need.

    Reply
  5. Edith says:

    I pay to do my laundry. I have a piggy bank in the cupboard with my laundry soap and deposit $1 for every load I wash. I should have plenty in the piggy bank when it comes time to replace the washer or dryer.

    Reply

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