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How to Save for a Big Purchase

Updated: Apr 2

How to make a big purchase without breaking the bank

Most of us have one purchase we daydream about. The thought constantly creeps in… should you pull the trigger and make the purchase? Many times, that voice of reason pipes up and cautions about the strain to your bank account and the financial implications. Just because it's a dream doesn't necessarily mean you can't afford your dream purchase. That's why we're here to help you save for your big purchase—whether that's a dream or a necessity.

The daydream

Can you imagine the waves crashing as you glide through the water? Maybe you long to have a boat. Or maybe you get easily seasick and that seems like an absolute waste of money to you. Perhaps it’s a car. (If it’s a car you want, follow these tips to afford your dream car.) For other people, the big purchase they long for is a vacation. (Follow these easy tips to save for a vacation.)

Or, in some cases, you’ve been waiting to pop the question to your significant other… but engagement rings are expensive and then there’s the wedding and all that comes along with it. These are big purchases, and they can add up and strain your budget. To keep you from starting your marriage off in debt, we recommend you set up a reasonable wedding budget. (We have plenty of tips to help you afford your dream wedding on a budget.)

Maybe the big purchase isn’t an item; maybe it’s an adoption of a child or a pet. (If you're wondering how a child may impact your finances, look no further, because a baby changes everything—including your budget!)

Whatever you’re saving for—a boat or a baby—it’s obviously important to you. So, it’s key to know how to budget for it. Sure, it can seem inevitable at times: you’re confident that boat will be yours, so should you just buy it now? Eh… Some careful planning can keep you from a boatload of financial regret (cough, cough, debt is no fun).

Turning your savings goals into a reality

But first, the necessities

Ensure you have the indispensable things nailed down. Make certain you’re prepared and up-to-date on payments for retirement savings, high-interest credit cards, all your debt is paid down… all those things.

Look at the whole picture

Plan out all the involved costs for the purchase. It can be easy to just look at the shiny price tag that doesn’t include tax or fees. What goes into the initial payment is just the tip of the iceberg, though.


There are future maintenance and upkeep costs that are certainly not free. That new pet needs trips to the vet and kibble to eat. A boat requires gas, permits, dock space and storage.


Practically everything "spendy" needs insurance. This is a dream purchase here, you don’t want to play around and lose the whole entire value of the precious item if something happens to it. Things break, things get stolen, and that’s just the way of the world. It makes sense to pay a premium on these purchases that is minuscule compared to the whole cost of the item. Many people consider insurance for things like engagement rings, collectables and family expensive heirlooms. Vehicles require insurance. Heck, you may even consider insurance for your life! You must ensure that you’re factoring these costs into your budget.

Explore savings options

Before even buying the asset, you can prepare for it. This is something you can start tackling way in advance, before you even have a clear idea of a big purchase. The further in advance you start saving, the more interest you’ll earn and the less risk you’ll have to take on.

High-yield savings account

This type of account will usually pay 20 to 25 times the national average of a standard savings account. Holding this account at the same bank as your checking account can make transfers between the two seamless and ideal for big purchases. This account will help you safeguard your principal and earn higher interest with less risk than the volatile stock market. These can be great options for saving for a shorter time frame, such as for a purchase you want to make within the next five years.

If it's a VERY long-term purchase, you may be tempted to use traditional investing and a diverse investment portfolio for a higher yielding return on that significant cash balance. But, slow down, partner— anytime you invest in the capital markets, there's volatility. That means what (stock) may go up, may also go down, especially over short time periods. We suggest you invest early and widely across the market if you have time before that big purchase. It's darn dear impossible to accomplish a quick wealth growth spurt from the market without risk.

While proper planning and budgeting sure can help you make purchases by helping you allocate your savings, it can’t magically multiply your money. Think of it as a puzzle: you can move the pieces around until they fit perfectly inside, creating your perfect picture (or ideal financial picture) but you can’t orient them to make a bigger puzzle. This could mean forgoing your monthly shopping spree or choosing to skip out on expensive dinners.

Remember the piggy bank or change jar

There is definitely some validity in the piggy bank you used to covet or age-old change jar you still have on your countertop. While these methods aren’t very good at saving thousands of dollars, and you sacrifice earning interest, the sentiment is there. Making small but frequent payments into savings accounts can make a big difference over time. Maybe that means putting a few hundred dollars away after each payday, or whatever allocation works for you.

Opt for other financing options

When it comes time to actually pay for the item, remember you don’t need to pay for it all at once. While there are some benefits to fulfilling some down payments immediately, if that isn’t right for you and your budget, that is okay!

Just pay attention to the interest payments. If you’re buying something you don’t need, and it’s going to cost you interest, really consider if you should wait until you can afford the whole purchase. We’re certainly not fans of high interest debt and how it can affect your credit.

Minimize the strain, maximize the fun!

These big purchases are meant to bring joy… not cause stress. So put some time and thought into your financial planning. Then, you can then focus on the excitement of the purchase, not the guilt of debt.

Your daydreamed purchases can become a reality. And we’re here to help. Hop into your To Do List and get at those to dos! All it takes is 3 minutes a week to achieve financial wellness. #YouGotThis!


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