If you’re anything like me, you set BIG goals! There are things you want (and need) to save for, but you also want to enjoy your life in the meantime. It can be challenging to balance big financial goals while still enjoying life but let me tell you…it’s worth the challenge!
I’m proud to say that I’ve accomplished some HUGE life goals. Things like leaving corporate America behind to run City Girl Savings full-time, purchasing my first home with my partner, and purchasing a second home/investment property in the Palm Springs area. I was able to accomplish these big things, and a variety of smaller goals, without completely sacrificing my lifestyle. I’ve never once deprived myself of an iced coffee…unless I was doing a juice cleanse! 😅
The point I’m trying to make is that there is a way to save for big purchases without sacrificing your lifestyle. I’m walking you through some of the tips and tricks that have worked for me over the years. I’m not saying you can avoid all forms of sacrifice and discipline, but there is a way to enjoy life in moderation in the present, while working towards those big goals you have!
How to Save for Big Purchases Without Sacrificing Your Lifestyle
Define your “Big Purchase” Goals
Here’s the thing… “Big Purchase” can mean different things to different people. A big purchase for one woman could be a new Louis Vuitton bag. A big purchase for another woman could be a new house. Your first step towards saving for a big purchase is to define what it means to you. What do you consider a big purchase?
Once you’ve decided on your big purchase, we want to take it a step further and specify when you want to make the purchase, and how much it’s going to cost you. Setting clear goals and timeframes can serve as motivation to keep growing your savings. You can stay focused on your game plan and reward yourself when you have enough to make the big purchase.
I do want to add that the more expensive the big purchase is, the longer it may take you to save for it. That’s okay. If the purchase is worth it to you to obtain, you will see the savings plan through to completion.
Review Your Budget and Evaluate Your Spending
First things first, you need a budget. Whether you’re saving for a big purchase or not, you need a budget. If you don’t already have one set up, that’s step one. Get your numbers in front of you. Start with your consistent income, bills and spending. Once that’s identified, you can determine what can be put to the side to save for big purchases.
If you have a budget, but it isn’t working, evaluate your spending. Are you actually sticking to the budget? Are you forgetting to include certain one-off bills or expenses? Pay close attention to what’s causing you to go over the limits of your budget. From there, identify areas where small tweaks can free up cash without sacrificing too much.
Create a Dedicated Savings Plan
Now that your budget is created and hopefully some spending tweaks have been identified, you can create a dedicated savings plan for those big purchases! I recommend opening a savings account specifically for the big purchase. One savings account per goal tends to be the sweet spot. A high-yield savings account would be your best bet.
Not only do high-yield savings accounts generate significantly more interest than regular bank savings accounts, but the funds also aren’t as easily accessible. This makes it easier to keep your money saved until you’re ready to make your big purchases.
Referring to your budget and making sure to only save what you can afford to put away, determine an amount or percentage of your income to save monthly (or per pay period). Take it a step further by automating your savings transfer every payday. This takes the work off your plate, makes for an effortless process and gets the money moved over right away.
Maximize Your Income Streams
Once your savings transfers are set up and everything is operating according to the budget, you can expedite the process of saving for big purchases by adding more income streams to your portfolio. Leverage bonuses, tax refunds, or side hustle income to help you make the big purchase even faster.
You can also allocate windfalls (like raises or unexpected income) directly toward your savings to help you speed things up. Leveraging extra income allows you to keep your normal bills and spending the same, but helps you make your big purchase faster. This is a win-win scenario. No sacrifice to your lifestyle, but you’re speeding up your goal timeframe!
Embrace Small Adjustments, Not Sacrifices
It’s very easy to have an all-or-nothing mentality when it comes to working towards goals. Money goals are no different. You may find yourself wanting to cut back on all non-necessary spending so you can make your big purchase faster. Don’t do that to yourself! Not only will your deprivation lead to an unwanted splurge, but it’s not a sustainable approach to saving for big purchases.
Instead, try to embrace small adjustments! Swap out high-cost indulgences for lower-cost alternatives. For example, you can opt for one fewer dinner out per month. You could extend your nail appointment to every 3 weeks instead of every 2 weeks. You can color or style your own hair.
Little changes like this will add up over time, but will help you skip feeling deprived. Deprivation is what leads to failed goals! Also, make sure you’re leveraging any “cashback” or rewards programs to offset costs. This could be through your credit card rewards program or a store’s loyalty program.
Celebrate Small Wins Along the Way
Guess what? Enjoying life now and saving for the future are not mutually exclusive! You can have and do both at the same time! A great way to reinforce that is by acknowledging savings milestones as you reach them. Once you’ve saved 25%, 50% or 75% of the amount needed for your big purchase, celebrate!
Treat yourself to a budget-friendly reward to help you stay motivated to keep up the great work. This could be an extra iced coffee, a dinner via delivery or anything else that will encourage you to keep saving for your goal. Don’t go too crazy here – we still have work to do! The point is to reward yourself for milestones along the way. This will help you stay motivated.
Stay Committed but Flexible
You can follow each tip I’ve shared thus far, and something could pop up and throw everything off. That’s life. Flexibility is such an important trait of working towards goals – especially money and savings goals. You will do yourself so much good by being flexible when things come up and throw your timelines off.
Have a plan for unexpected expenses before they happen. Maybe you can identify a few non-necessary spending areas that can be paused to help cover the cost of the unexpected expense. Maybe you can seek out extra income to help you adjust your savings plan, if needed.
I want to encourage you to stay committed towards saving for your big purchase but be flexible and fluid when things come up that aren’t planned for. Don’t be afraid to revisit and adjust your budget or savings plan. Consistency, not amount, is the most important determinant of success.
Related: Budgeting for Big Purchases
There’s no denying that putting all your extra money towards a goal will help you reach it faster, but faster isn’t always better. We want to budget for the long haul. That means we need to learn how to stay consistent working towards savings goals but do so while enjoying life. Hopefully the tips I’ve shared today can help you start saving for those big goals you have, without sacrificing your lifestyle.
What big purchases are you currently saving for? What adjustments have you made to your budget and spending to help you reach those goals? Drop a comment below to share!
-Raya
The CGS Team
