When you're a kid, you were probably always looking for a way to get that next toy or game. You may have done extra chores, asked Santa Claus to bring it to you for Christmas or saved up your allowance. Adulthood is no different, except that the items you desire have most likely changed and that you are responsible for paying bills in order to keep yourself and your family safe and healthy. So how do you save up for that one thing you've always wanted while keeping your finances well-balanced? Here are some tips to get started.
1. Make a Plan
Step one in reaching your goal is to set it. Figuring out how much it's going to cost up front may seem simple, but depending on what you're saving for, it may include more than just the initial price tag. Will you need to pay someone for professional installation? What will maintenance cost each year? Is it going to impact your current utility bill or require someone to take care of it while you're gone? Break each of these down into monthly expenses that you'll need to work into your budget. If you're taking out a loan on the item, you'll need to determine what your monthly payments are going to be, including interest. You can use tools like this pool loan calculator to help you figure out what that number is going to be.
2. Update Your Budget
The key to any plan for saving money is to know where your finances are going now. You may already have a budget in place, but now you need to revisit it and make sure it's up-to-date. Next, you'll need to look for areas where you can cut back to free up enough money to match the total monthly cost you already calculated. If you create that new category now, before you have the item, you'll be able to use the extra money you're setting aside each month to make the initial purchase. You'll also be getting used to your new budget in other areas. As you do this, make sure you are honest with yourself as you weigh costs and benefits. Yes, having a new pool might be great and might seem like it would cut vacation costs, but are you really willing to give up a family trip? A pool will probably be able to replace some amusement park tickets and birthday party venues throughout the year, though.
3. Work to Cut Costs
Whether you decided to permanently cut back in other budget categories or are just using money you didn't spend during the month to put toward your new item, it's time to figure out ways to save money. Check your mailbox and local newspaper for deals, use a coupon app, and watch your email for sales from brands you usually shop with. Try to plan your grocery list around the current deals going on at your local store, hunt for affordable clothing, sign up for rewards programs with companies you shop with often, and plan your larger purchases around annual events like Labor Day sales and no-tax weekends. Cutting back a little at a time can really add up.
4. Keep Paying Off Debt
It may seem counterintuitive, but don't skimp on paying off your debt as you save. The longer you wait to get out of the hole, the deeper it becomes, and the more strain is placed on you and your budget. This doesn't mean you shouldn't save up for fun things: It just means that the money you've put toward your payments shouldn't be cut down to pay for them. Make paying your debt a priority, and you'll be able to enjoy the item or experience you're saving up for that much more.
5. Find Other Ways to Earn Money
Starting a side hustle is easier than ever. You can sell handmade decor, offer tutoring or childcare services, or clean houses. You can also earn some extra cash by selling furniture or clothing you're getting rid of at a garage sale or on an online platform like Facebook Marketplace. Some people are also successful posting their items on their own social media pages. Get your family on board as well. You may be surprised at how willing your kids are to give up some toys at the promise of a new pool or fun vacation.
Even though it may seem daunting, there are ways to wisely save money for that treat you've always wanted. It just takes some organization, discipline and creativity. How are you going to start saving today?