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Wondering how to save for large purchases so you don’t have to go into debt? In this post, I’m breaking down the 6 steps to help you pay cash for big purchases.

Do you have a large purchase coming up? Or something in mind that you want to buy, but don’t have all the money for just yet?

When you want to make a large purchase, do you save up cash or do you use credit?

How can you avoid using credit when making these large purchases?

When we make large purchases, like a new (to us) car or a tractor or off road vehicle, we always pay cash. It’s not easy, but it can be done with just a few simple steps!

Paying for large purchases with cash will save you money in the long run and you will feel so proud to have made the purchase debt free.

6 Tips – How to Save for Large Purchases

Use the following tips to learn how to save for large purchases. Whatever purchase you are wanting to make, try to save up enough cash to buy it debt free!

You will save money, possibly be able to negotiate a better deal, walk away owning it, and feel so proud to have purchased it debt free.

1. Know your goal amount to save.

   Before you start saving, you need to know exactly what your savings goal is.

   Research prices and decide on how much you will spend on whatever it is you are saving for. Set your savings goal based on this dollar amount.

   Now you know exactly how much you need to save up!

   Related Post: How to Save Cash for a New Car

2. Make a savings plan.

   Now that you know exactly how much you need to save, it’s time to make a savings plan.

   If you need to make the large purchase by a certain date, you can divide the amount you need to save from the months you have until then. If you don’t already have a date in mind, go ahead and make a goal date to have all your money saved.

   So you need to know exactly how much you need to save and by when. That’s step 2.

   Related Post: 20 Tips to Pay Off Your Mortgage Early

3. Break it down into monthly and weekly savings plans.

   Now you need to break down your big goal into monthly and weekly savings plans.

   How much do you need to save each month to reach your savings goal? Now break that down into weekly savings goals.

   This makes saving much more doable and actionable. You now know exactly how much you need to save each week and month to reach your goal.

   Related Post: Becoming Debt Free: We Paid Off Our House

4. Open a separate savings account.

   You need to keep your money set aside for this large purchase so it doesn’t get spent on other things. You are working hard to save this money, so make sure it goes to what it’s intended for!

   Open a separate savings account just for this large purchase. You can even label it in your online banking with whatever the money is for. (Example: New Car Savings Account)

   Related Post: The Multiple Bank Accounts You Need to Budget Better

5. Set up auto transfers on pay day.

   Each time you get paid, transfer the amount you calculated in step 3 to your dedicated savings account.

   If you get paid weekly, transfer the weekly amount. Paid biweekly? Transfer 2 weeks worth.

   I love this book to stop living paycheck to paycheck, so you can find a little more money to save for large purchases like this. Check out How to Stop Living Paycheck to Paycheck here.

   Set these transfers up to be automatic on your pay day. This way, you won’t forget to transfer the money and you won’t ever see it in your normal spending account.

   You won’t miss the money being there if you never see it. Out of sight, out of mind. Your account will be saving you money with you doing zero work.

   Related Post: Top 25 Frugal Living Secrets

6. Make extra money.

   This is optional, but will help you reach your savings goal so much faster! Making side money has been the biggest factor in us reaching our financial goals quickly.

   If you have a little extra time to work a side job, consider doing so to reach your goal much faster. You can find things to sell around your house, work a 2nd job, or start a side hustle to make extra money. Just make sure the money made goes towards your savings goal.

   Deposit the money into your dedicated savings account to keep up with how much you have saved.

   If you don’t have the desire or time to work a side job, try a no spend challenge to save more money. This super cheap book will help you complete a no spend challenge to save a ton of money easily. Check out The No Spend Challenge Guide here.

   Related Post: 30 Side Job Ideas

There you have it! The 6 steps for how to save for large purchases. You can make large purchases with cash! Stop depending on loans and being in debt to buy the things you want and need.

Make a goal and use these 6 steps to save up the cash to make your next big purchase.

Yes, it’s easier to get a loan or go into debt to buy big things, but there is another way. And you will save so much money and be so proud of yourself for saving and paying cash.

Be different and be debt free!

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