How to Save Up for Big Purchases: Complete Guide

Save Up for Big Purchases

Do you dream about driving down the freeway in a new luxury car? Maybe you want to move your family out of your apartment into a free-standing home? Perhaps you’re thinking about taking that trip to the island paradise of Tahiti?

Whatever your desire, it costs money to make your dreams come true in the modern world.

Unfortunately, for most of us, most of these ideas are out of our immediate reach when we think about the cash involved with a big purchase.

Today’s economy doesn’t provide us much opportunity, and with stagnant wages, and rising inflation – it’s a struggle to get by every month, let alone afford a big purchase.

However, that’s not to say that you can’t achieve your financial dreams. It’s possible to achieve your goals if you know what to do, and with this article, we intend to provide you with a roadmap to turn your fantasy into reality.

Get Your Mind Right

If you spend your days dreaming about your big purchase – then they will remain in the realm of fantasy. To manifest your vision, you need to get your mind into a place where you subconsciously chase down your goal, step-by-step, until you bring it into your reality.

As humans, we are all reactionary by nature. We react to our current environment, and our thinking process responds to the stimulus we receive every day. Therefore, if you want to acquire a big purchase, you’re more likely to think about how you can’t have it, than how you can achieve your goal.

Taking a proactive stance is the opposite of reactive thinking. By being proactive, you think about what you need to do to achieve it, and your mind switches gears. As a result, your subconscious activates your RAS.

RAS Stands for Reticular Activating System

The RAS comprises a network of neurons in the brain stem which projects anteriorly toward your hypothalamus to regulate your behavior.

As a result of activating the RAS, you start to see opportunities that you would otherwise miss. The RAS is the reason why when you buy a new pair of shoes; you suddenly begin to notice more people wearing them than you did before your purchase. In this case, the RAS works to identify the shoes because you start to think about them, and it brings them to your attention.

Using this piece of knowledge to your advantage will serve you in your quest to make your dreams come true.

To activate the RAS, all you need to do is enhance your focus, and ask yourself how you can achieve your goal.

  • Every day, stand in front of the mirror and stare yourself in the eyes.
  • Tell yourself that you will attain your desire, and ask yourself what actions you will take to make it happen.
  • You don’t need to know the answer to this question.

What you’re doing is forwarding the question to your subconscious, while activating the RAS. As a result, your mind will start to notice opportunities, and you’ll suddenly find that you are in the right place at the right time to attain the components that lead you toward manifesting your goal into reality.

While this may sound a bit kooky, there is clinical evidence to suggest it works. For example, if you focus on your goal, and ask yourself every morning, “how can I make more money?” You’re programming your subconscious to bring you the answer.

Don’t expect this strategy to make a big bag of money fall out of the sky – that’s never going to happen. However, don’t be surprised if one day, you find yourself working late, and the boss approaches you to commend you on your work ethic. Maybe they offer you a raise, or maybe they tell you to head up a new project in your overtime, allowing you to earn more.

While this may seem like a coincidence, it’s not. Your RAS and subconscious made you start working a little bit later without you realizing, placing you in the position to get what you need to make your dream a reality.

There are millions of people who experience this phenomenon every year.

Get your mind right, and you’ll start to find yourself in the right place at the right time.

Minimalist Lifestyle

Read: The Minimalist Living Lifestyle: Complete Guide

Create a Savings Plan

After getting your head around your goal, and gaining the belief that you can achieve what you conceive, now it’s time to step on the gas pedal and make it happen. Work out how much money you need for your goal. Maybe its $80,000 for that new car, $350,000 for that family home, or $20,000 for your dream vacation.

  • Whatever the amount, write it down.
  • Writing the target down on paper, instead of typing it into your computer creates a physical connection between you and the goal.
  • A wise person once said that if you don’t write down your goals, all you have are dreams – and that’s so true.

Next, clearly define how you want to achieve that goal in realistic terms. Let’s use the example of the $80,000 car. You need $80,000, and that may seem out of reach – but that’s not the point of this exercise. Let’s say you give yourself 2-years to realistically achieve your goal. That means you need to save $6,670 every month to meet your target – that’s a tall order.

However, all it takes to activate the RAS, and subconscious is to start taking proactive steps toward this figure. Open a 24-month CD with the bank, and begin contributing everything you can spare to that CD. By doing this, you activate the subconscious, telling it to find a way to make more money to meet your target.

If you remain diligent toward your target, the mind will slowly start to look for ways to make more money to achieve your goal. You may only be able to get $2,000 into your account for the first few months, then all of a sudden you get that overtime opportunity, or start to look for opportunities to earn more income to fill the gap.

If you remain steadfast in your quest, you’ll eventually start to edge closer and closer toward your target. Your mind will begin to notice the small wins, and you’ll build momentum. Remember; what you think about, you bring about.

Digit Savings App Review

Read: Digit Savings App Review: Automatically Grow Your Savings

Examine Your Expenses

Do you know where your money goes every month? Do you use a budget to manage your expenses? If not, then you need to start taking advantage of this powerful financial exercise.

Write down a list of everywhere you spend your money. The rent, groceries, medical bills, debit orders, eating out – all of these need to go down on your list. Try to account for every penny you spend during the month, even the change you give away to people on the street while commuting home.

When you have your list, start to analyze where you can cut back on your expenses. Do you need your streaming services? Maybe you could get by with a lower-cost cellphone package? Could you be renting in a cheaper area of town? Perhaps you could save by avoiding eating out so much – or cutting out that second latte on the way to the office in the morning.

Make a concerted effort to save money wherever you can, and write down your savings at the end of every month. Send the extra funds to your bank account, and watch your investment grow toward your goal.

Being frugal in life may seem like taking steps backward and away from your goal. No-one wants to admit that they can’t afford to lead the life they live. However, when you start to see the savings accumulate, you’ll strengthen your resolve and reinforce your behavior in your mind’s eye.

Pretty soon you won’t even miss your Netflix subscription, your new apartment may seem better than your old one, and that second latte is a distant memory.

If you’re having trouble with coming to terms with your downgrades, think about your goal and remind yourself why you are taking these actions.

Living Below Your Means

Read: The Complete Guide to Living Below Your Means

Kill the Credit

We live in a society where many of us rely on credit to help us through the month. However, many of us misuse our credit, turning it into a form of usury that we find challenging to escape. If you find yourself maxing out your credit card every month, then it’s vital that you follow the second step in the process, and start to whittle down your expenses.

Use the savings you make on your budget to reduce your credit card debt and any outstanding personal loans. Credit facilities come with high-interest rates known as APR (Annual Percentage Rate). If your credit facilities are maxed out, the chances are that your bank is charging you an APR of around 20-percent to limit your bad spending habits.

If you have a credit card with a $5,000 limit, try to reduce your outstanding balance to a maximum of $1,000 per month. Always pay your card in full at the end of the month, and you can start to earn cashback through the rewards program offered with your credit card facility. If you don’t have a cashback facility, apply for a card that provides one, and get rid of your old card.

Add these cashback savings to your investments, and keep your money growing. By killing your credit, you leave yourself feeling financially sound, and out from under the thumb of crushing debt loads that derail your progress toward your goal.

Read: 4 Ways You’re Probably Misusing Your Credit: What to Look for

Don’t Waste Your Time

Many of us don’t understand how much time we waste in a day or a week. Do you know how many hours you lose every day? Going to work and exercising are excellent ways to make productive use of our time. However, what do you do with your spare time? Do you get home from work and laze around on the couch all evening?

Think of this example. Let’s say you return from the gym after work at 7 pm, have something to eat, and then turn on the TV at 7:30 pm. After an evening of relaxing, you retire to bed at 11 pm and then wake up the following morning to rinse and repeat the day.

In this example, that 3.5-hours you are wasting in front of a screen every day. Times that by 5-days in the workweek, and you get 17.5 hours every week that you could be doing something else to move you toward your goal. Multiply that figure by the four weeks in a month, and that figure grows to 70-hours. Multiply it again by 52 weeks in a year, and it becomes a staggering figure of 840-hours that you are wasting every year.

Considering that the average person works 40 hours a week, that’s 21-working weeks you are blowing every year in front of the TV or over 5-working months. Small amounts add up over time. What else could you be doing to reach your goals instead of sitting in front of the tube?

Create a Secondary Income Stream

Now that you know how much time you’re wasting, you had better stop snoozing and get moving. Find a way to make more money in your downtime. In our example, we didn’t even count weekends into the wasted tie equation.

Do whatever it takes to make more income for yourself. Volunteer for extra hours at work, or start a freelancing gig. Work as a bartender in the evenings, or learn to trade the markets after hours. The point is to be more efficient and productive with the time you have available. Save watching TV for when you retire, and you’ll find money starts flowing into your savings faster than you can imagine.

Making Money Guides

Wrapping Up – Create a Vision Board and Stay Motivated

Working those extra hours and staying on track to meeting your financial goal for that new car is going to take dedication and effort, but no-one said this was going to be easy.

If you find yourself starting to feel distracted from your goal, create a vision board. Cut out pictures of the car you want from magazines. Visit the dealership and have the sales rep snap a photo of you sitting in the driver seat. Paste those pictures on a piece of cardboard in a collage, along with images of stacks of money.

This exercise continues to feed your subconscious and the RAS, giving you’re the inspiration to stay motivated to reach your goal. If you follow the advice in this article, it won’t be long before you revisit the dealership and drive your new car out onto the road. Congratulations, your dream is now a reality.

Avatar

Oliver Dale is Editor-in-Chief of MoneyCheck and founder of Kooc Media Ltd, A UK-Based Online Publishing company. A Technology Entrepreneur with over 15 years of professional experience in Investing and UK Business. His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. He built Money Check to bring the highest level of education about personal finance to the general public with clear and unbiased reporting.


oliver@moneycheck.com
http://twitter.com/olidale
http://www.linkedin.com/in/oliverdale

Content on Moneycheck.com is provided for general informational purposes, and shouldn't be seen as an offer to buy or sell or a solicitation of an offer to buy or sell any security, product, service or investment. The opinions expressed on this Site do not constitute investment advice and independent financial advice should be sought where appropriate. All our articles fact-checked by a relevant professional with expertise in that area of finance and we regularly update guides as necessary.

Leave a Reply