How to save for a large purchase

Large purchases such as cars or houses often require a deposit upfront; yet saving for this is not always so straight forward. Essentially you can either try and earn more, or spend less, which may sound simple on paper but is not so easy in practice. Use these tips to build up your savings and purchase your dream car or house in a shorter period of time.

1. Save money in a separate account

If you leave savings in a general account it is much easier to access and use without thinking. Rather setup a separate savings account with a high interest rate and keep your intended nest egg apart from your day-to-day funds. A debit order from your usual account to your savings account will also force you to save the same amount each month.

2. Cut back on non-fixed expenses

Non-fixed expenses can be anything from groceries to entertainment. Cut back on eating out and plan your meals using cheaper ingredients rather than expensive produce. A weekly meal plan can help reduce costs as you only purchase ingredients necessary for the listed meals. Eliminate expensive entertainment and rather stay in and play exciting casino games at than head out for a night on the town.

3. Put in some overtime

If you work in an industry where you can put in extra hours and be paid accordingly this can greatly boost your monthly income and savings. If your industry does not allow for over time then search for a second job or freelance work and try baby sitting or waitressing to increase your monthly savings. A second job does not have to be taken on as a long term commitment, rather find something that you can do for a limited period of time to maximise your savings potential in as short a time possible.

4. Sell items online

If you have a large amount of DVDs you never watch or other items that you can live without sell them on a site like eBay. Do not throw away unwanted items as they may be valuable to someone else, rather setup an account and auction them off to generate extra savings. If you can manufacture a product and sell it online this can also be a great way of boosting your income and sites like Etsy are the perfect place for crafters to display their wares.

5. Rent out space

If you live near a college or university or are on a major transport route consider renting out a room in your house or apartment. Alternatively, if you have a parking bay at home or at work see if someone wants to lease it from you whilst you park further away for free. Many smart consumers are offering advertising space to companies on their cars, and being paid for driving a branded car is a great way to make money whilst on the move.

A little bit of creative thinking can help you save for a large purchase in a shorter period of time. Always remember, the more you save, the higher the interest earned so utilise this advice and ensure that your goal is within reach in a shorter period of time.


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