Thanks for stopping to read 6 Steps to Save for Big Ticket Purchases!

Are you dreaming about a tropical vacation? How about buying a new car? Or maybe the big one – saving up for a down payment on a house. Any other big ticket purchases on your horizon? Make a commitment to follow these 6 steps to save for big ticket purchases, and see how easy it can be to adjust how your spending habits to a savings goal.

1. Figure out the Cost

Let’s start with something that might be somewhat easy to save for. Christmas.

6 Steps to Save for Big Ticket Purchases


We all know it comes once a year even though sometimes it seems like Christmas sneaks up on us. We don’t have enough money saved and so we whip out the credit cards. And pay for it in January. Or maybe for a whole lot longer. Based on Christmases past, calculate how much money is spent on presents, decorations, and food. Let’s call it $1200 because that’s an easy number to work with. Get an envelope and list each month. In January put in $100 cash and cross it off the envelope. In February put in $100 and cross that month off the envelope. And so on. You can start this process any month of the year. Just make a decision if you’re starting where you’re at or whether you plan to make up the past months.

Either way, don’t beat yourself up about it. The important thing is starting a savings plan for the one big expense we know happens each year. When it’s time to start Christmas shopping, use the cash in the envelope. When it’s used up, you can decide whether to dip into another savings account or use credit cards. That will give you a good idea what your budget should be for the next Christmas. Divide that number by 12 and contribute to that envelope.

When contributing each month to the Christmas envelope has become a habit, you can apply the same principal to big ticket purchases.

Do you want to buy a car, a house, new furniture, or go on a vacation?

The house is probably going to require a mortgage, so the savings goal should be for a down payment and other assorted costs that arise when purchasing a house.

A Panama Canal cruise might cost around $5,000 for a couple. Can that reasonably be saved in 2 years? That works out to $208/month to put in savings. Make it a higher amount, to take in price increases, shore excursions, and souvenir shopping. Put aside $250/month and you’ll have a nice vacation ahead of you.

2. Cut down on Spending

Do you have expenses that can be eliminated or downsized? Do you go out daily to buy coffee and snacks? Eat lunch out at work instead of brown bagging it? Do you have more TV channels than you’ll ever watch? For more suggestions on how to save over $2000 a year, that can then be transferred over to your special savings account, check out my article 7 Easy Ways to Save at Least $2000 a Year! 

3. Make the Savings Automatic

Have you read David Bach’s book, The Automatic Millionaire?

(Disclosure: if you click the above link and purchase the book from Amazon, I’ll receive a small commission for the referral.)

It’s been around for years, but the author recently updated it. There’s lots of good advice on saving, reducing debt, investing, and spending. And you can do all this without a lot of money and without a budget.

Many financial advisors, including David Bach, recommend setting up an automatic transfer of monies to a separate savings account to help fund retirement or investments. The same concept can be applied to saving for big ticket items. The idea is if the money is automatically transferred out of the bank account, say on payday, you won’t miss it as much, or you’ll figure out how to budget the remaining funds without dipping into this special saving account.

4. Time Frame

When you make it a goal to save for a big ticket item, give it a time frame. Otherwise you’ll be saving forever with no concrete plans to stop saving and make the purchase.

The first scenario about creating a Christmas fund will be ongoing.

Perhaps you decide to put aside $100/month for a vacation, but you’re not sure where you’ll travel to. After a few months you narrow it down and decide to go to Spain. Now’s the time to figure out travel costs and adjust the time frame.

5. Stick with the Plan

Make a commitment to save for your big ticket item. Besides putting the money aside, it means planning, gathering information, and perhaps getting advice from a professional.

Your goals should be realistic and can be achieved in your time frame. Deciding to put $10/month towards an around the world vacation “to be taken sometime in the future” isn’t actionable.

You may find that your goals have changed, and other priorities in your life have forced you to take another look at saving for your big ticket item. It’s OK to change course. Revisions are sometimes necessary. Don’t keep saving up for that honeymoon in Mexico if the wedding is called off!

6. Found Money
Beautiful Appaloosa purchased thanks to the horse fund.

Accelerate your saving goal with found money. This is money you may or may not have been expecting, but all of a sudden there it is. It’s not too painful to put unexpected money into the savings account. When I was saving to buy a horse, my tax refund went to my “horse fund”. For some people it might be more realistic to put half their tax refund to their big ticket savings account, but get it in there before it’s spent on something else.

I put all my spare change into a coin sorter. When I had enough coins, I rolled them, took them to the bank, and put it into my horse fund. Make sure everyone in the house knows not to touch those coins. One day when I was putting my change into the coin sorter I noticed I didn’t have as many coins as I thought I had – they’d gone down in numbers! Upon questioning, the deadbeat had been helping himself so he could buy coffee and a bagel at Tim Hortons. He felt bad when I said that was my horse fund and contributed a $20 bill.

Other found money could take the form of receiving cash gifts for birthdays and Christmas. What about a bonus at work? Any unexpected money should go to the savings account for the big ticket item to accelerate the time frame.

Wrapping it up!

As your savings increase, you’ll have peace of mind knowing that you have funds for your big ticket purchase.

What are you saving up for? Do you have any tips to help save for those big ticket items? Leave a comment below.


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