How to Prepare for a Major Purchase
Whether you’re itching to replace your worn-down car, or have dreams of finally buying a home, approach your next major purchase with care. After all, it may take years to save up enough and—this is the important part—still maintain your financial security.
Here are four tips to help you add an asset to your life safely, successfully, and sooner rather than later:
- Are You Ready?: Asset accumulation usually requires preparation. Before you implement a plan to save up and make a major purchase, make sure you have financial protections in place, like an emergency fund and adequate insurance. Otherwise, an accident can throw you into debt and dislodge years of hard-earned savings progress! Make sure you also have a solid understanding of basic financial concepts, like inflation and market risk, to prevent the unpleasant surprise of finding out you haven’t saved enough to own your own home within the timeframe you wanted.
- Systematically Plan: Don’t just “save whenever you can” and hope you’ll have enough money for a house within ten years’ time. You will have an easier time acquiring future assets if you budget an amount to save monthly specifically for this goal, and tweak that amount based on your needs and progress.
- Automate Passive Saving: Schedule automatic transfers out of your checking account and into your retirement account, as well as a fund created specifically with saving for this purchase in mind.
- Save and Keep Saving: If we continuously look for ways to reduce unnecessary spending, maximize our budget for savings, and look for ways to increase our income, we take ourselves closer each day to our next asset, be it a house, an investment product, or a new couch.
To learn about strategies for asset accumulation, and other ways to improve your financial life, visit Syncis at http://www.syncis.com/blog/.
