Major purchases, such as a house, renovation, car or even a big trip, can often feel out of reach because they can take so long to save up for. When your budget is already tight, finding a few extra dollars here and there to throw at a savings goal can seem like an impossible task. However, with a few thoughtful strategies, you may be able to build up funds faster than you think.
Whether it’s generating additional income, taking a DIY approach or contributing toward your goal first before buying any extras, there are ways to make saving a much easier, faster process. As financial experts, the members of Kiplinger Advisor Collective have years of experience helping others achieve their financial goals. Here, they offer seven smart tips you can leverage to reach your savings goal and start enjoying your purchase as soon as possible.
Focus on making it fun
“To make saving up for a large purchase easier and quicker, make it fun. Break it into digestible chunks so that you can track your progress. Seeing progress will motivate and reward you on an ongoing basis. Remember, the journey is usually the most fun — not reaching the goal itself. Once you've reached the goal, you must set the next goal.” — Deborah W. Ellis, Ellis Wealth Planning
Find ways to make additional income
“If you have a small salary, saving money in a bank might seem like a good idea. Unfortunately, if inflation is high, your bank savings actually gets devalued over time. If you want to save for a large purchase, consider a side hustle to make additional income. Also, investing in risk-on assets like stocks and crypto, especially during bad days, may also help.” — Zain Jaffer, Zain Ventures
Save any 'found' money
“The first step in reaching a savings goal is to set up a separate savings account and title it accordingly. Then, it's vital to have automatic savings deposits made each and every payday. To accelerate reaching your goal, save your ‘found money,’ which is money from rebates, tax refunds, bonuses and also side hustles.” — Jason Vitug, Phroogal
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Take on projects yourself
“Invest time in learning how to do things yourself instead of paying for services. For instance, learn basic car maintenance, home repairs or how to cook meals at home. The money saved from doing these tasks yourself can be substantial and can contribute to your major purchase fund.” — Manoj Kumar Vandanapu, UBS AG
Save toward your goals, then live off the rest
“Figure out how much you want to save toward your goal first — then do it. It's like the concept of paying yourself first before spending. Here, save for the goal or goals, and then live off the rest. If you need to adjust, that is OK. At least this way you are putting your goal or goals ahead of random frivolous spending.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management
Cut out unnecessary expenses
“Do a deep dive into your budget and cut out unnecessary expenses. Then, set up an automatic withdrawal from your checking account for the discretionary income and put it into a short-term investment vehicle to help you quickly save up for your goal.” — Louis Barajas, International Private Wealth
Set up an automatic savings plan
“One effective way to save for a large purchase is to automate your savings. Set up a dedicated savings account and arrange automatic transfers on each payday. This ‘set it and forget it’ method makes saving effortless and accelerates the process by consistently building funds without requiring active management.” — Stephen Nalley, Black Briar Advisors
