How to Budget for Big Expenses - Save or Lend : PaydayLV
Big expenses may not be easy for your wallet. Here are some tips and tricks that will help you to make a budget for the big expenses.
Creating a budget on a monthly basis does make the perfect sense. You get paid, and you spend on your rent, utilities, and other essentials with the money. Very simple right? But living this way has one issue, as certain expenses like a long-awaited holiday or throwing your best friend a party requires you to have some savings. Now, it is not unlikely that, like many others around you, all your finances are not in the greatest shape of all time because of the pandemic. But the occasions can not wait, so we have compiled a list of guidelines for you to follow to help you save up for the big expenses in life. So, without further adieu, let's get started.
Plan you budget
For any big purchase, the most important thing is proper planning. The earlier you start the planning, the easier it will be on your wallet. So, whatever you are planning to spend, make a clear estimation. It is always advised to overestimate in case you need to spend some additional cost like a price hike. Divide your expense by the number of the paycheck you are expected to receive, so you know exactly how much you must stack up for the purchase.
Now that you know exactly how much to save each month from accommodating your new purchase, it would be great if you could save up a little before the purchase. Monthly saving can be tough if you are barely making it till the end of the month with your current paycheck, we will advise you to start a side hustle or start working overtime to get some savings.
There are online side hustles you can start for that, find something you are passionate about. You can sell your skill on platforms like Upwork and Fiverr and have a good amount of money saved up at the end of the month. You can also start a website and start blogging if that interests you, the bottom line is the world is smaller than ever, and if you are willing to put in the grind, there is some form of side hustle you can start.
If your current job allows working overtime, you can avail that option too. Overtime usually pays well, and working during national holidays sometimes pays up to thrice your usual rate, so try that option. Now, it is almost certainly working long hours will affect you mentally, there are times you would want to give up but think about the outcome that you will get, whether you're saving for an essential thing like a car or have that much-awaited vacation planned, think about the outcome and the sense of pleasure you will have when you finally have the money to afford it. This feeling will give you the strength and power to wake up every morning and continue on your quest.
Where to Save
Where you are saving some money, it is important where you keep it. Once you know how much money you need to save each month to pay for your items, there are a few options. If you are good at tracking and budgeting, you can set up a general savings account, which will allow you to transfer the money you need each month to that account.
You may also choose to create a separate fund to hold the money while you are saving it. Having a different account will ensure that the money is not spent on general expenses, and it will also motivate you towards your goal. Saving it at home or piggy bank is a big no-no, and we have seen how easy it is to get carried away, and there are also safety concerns. Having the money in the bank account will also incur small interests if you are eligible, and if you are saving for the long term, the small interest will pile up into a decent amount of money.
Another huge mistake many people make is that while they are saving for their big expense, they totally discard the need to put aside some cash for emergencies. The only thing predictable in life is its unpredictability. So, no matter how cautious you are, life will find a way, so it is wise to put aside some funds for emergencies. You don't want to spend your savings account on any urgent emergencies, right, so always set aside at least three months worth of expenses in a savings account for things like losing your job or becoming ill, so you can't work and need some rest. Also, despite how tempting it might be, you should never borrow or tap into your emergency savings to pay for vacations or other expenses. You'll end up in serious financial trouble if you make it a routine and end up not having any funds at all.
It may take up to several months to build up the budget for the big purchase. Make sure you review your finances thoroughly before pulling the trigger. You must also check if there is any bill that needs to be addressed or any renewal fees. We know throughout the article we were a bit harsh on your budgeting, and we completely understand saving up for so long can be a bit too much for you. So our last tip is that you should consider taking a fast payday loan when you have saved up the majority of the amount and can't wait any longer to make the purchase. These loans are super easy to get approved for as they require no credit check. Yes, seriously. So anyone, even with a bad credit score, will get his loan approved. In addition, payday loans have very low requirements. All you need is a banking account and a job to pay off the loan, that is about it, and the best part is your loan will be approved within an hour of applying, given that your employment can be verified.
There you have it, the most comprehensive and effective way to save money for an upcoming expense. We wish you all the very best and would love to hear back from you. So don't hesitate to comment and let us know your thoughts.