At least once in your life you are going to purchase something known as a “Big Ticket Item”. These things are typically a house, a car, a motorcycle, an airplane, etc. We all know you are eventually going to do it, and chances are you know for years that you are going to.
For instance, I’m going to need a new car in a year because this one is having problems. Or I know I’m going to want to buy a house in the next 5 years. Or Gee, I really like flying; I think I want to buy an airplane. (ok the airplane thing is a little over the top)
How do you prepare your budget for things that are more of a surprise or planned? You meet the boy or girl of your dreams and you get engaged? Or you get pregnant?
If for example you wanted to buy a car in the next 5 years; where do you start?
1.) Research what kind of car you might be purchasing (SUV, Crossover, Truck, Sedan, Sports car?)
2.) Set an overall budget for the car ($17,000? $25,000? $40,000?)
3.) Figure out your monthly saving budget. (for a $25,000 car for 5 years you need to put away $416.66 every month to pay the car off in full when you want to buy)
4.) Can you afford to put that amount away every month and still keep up with everyday living expenses and bills?
5.) Once you have the money available – research, research, research!
6.) Go out and get that new beauty or a vehicle and go on a nice long drive!
Here’s a confession of mine: I am an early plan shopper. I start my Christmas shopping in August; I was buying things for my house years before I bought my house (like my dishes, towels, sheets, cutlery, etc.) I had picked out my wedding dress before I was even engaged. Some people think I’m crazy – but to me, when push comes to shove I’m not scrambling for money at the end of it and 95% of my purchases are done with cash and not credit.
I’m not saying you have to do what I do but if you know something big is coming up in your life – don’t procrastinate and not budget for it. Put something aside every month but don’t dip into your emergency savings. Do your research and watch for sales and be prepared for pretty much anything that comes at you.