Borrower Counseling Group
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July 06, 2010
If you’re in college or are a recent graduate, summer is a great time to prepare for the future. Summer can be a time of transition for a lot of people, college students and grads alike. And it can be an expensive time for a lot of people, too.
Maybe you’re moving to start school or a new job. Or maybe you’ve decided that it’s time to buy a car. Whatever the reason may be, planning for major purchases should be part of your summer budgeting strategy.
Planning for Major Purchases
Planning for major purchases—like a vacation, a car, or a home—is smart, especially when you know a certain expense is coming up. And saving for major purchases goes hand-in-hand with planning.
The thing you’re saving for might be very expensive (like a house) or a long way off (next year’s vacation). It may also be so big that even if you save, you may not be able to afford the entire cost. But any amount you can pay up front will save you money in interest later down the road. That’s why it’s important to make saving as simple as possible:
- Set up a savings account just for your purchase. This way, your savings progress will be simple to track.
- Set a timeline. If your car is on its last legs or you have travel expenses coming up, you’ll have a fixed amount of time to save for your purchase. Figure out how much money you need to set aside each week to reach your goals.
- Keep motivated. Let’s face it—pinching pennies can be hard. Keep motivated by tacking up a picture of the thing you’re saving for, and ask your loved ones to encourage you.
The best way to start planning for major purchases is to create a budget. A budget will help you determine how much money you can save toward your big purchase and how long it will take you to save what you need.
After reviewing your budget, you’ll also be able to tell how much money you’ll need to borrow in order to make your purchase. Use our budget calculator and budget worksheet (pdf, 0.34 MB) to get started.