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How to Plan Ahead for Expensive Purchases

When a sudden, unexpected expense happens, we might turn to options like credit cards to help us over the hump. While not the perfect solution, they offer some relief for our bank accounts by letting us spread out repayments when that would otherwise be unavailable.

But what about expensive purchases you know are coming up? Relying on credit cards or personal loans may be options, but let’s look at a couple of other avenues to explore. When you know what’s in your buying future, it’s all about saving - and we’d like to help you figure out how to do just that.

First Things First: What Savings Plan Works For You? 

Everyone’s budget is different and so is the amount you’re able to save each day. Yet you can’t plan without having a final number in mind, so we start at the end and go backwards. Here’s how it works:

  1. Calculate the number of days from now until the day you want to make the purchase.
  2. Divide the purchase cost (including potential taxes and fees) by the number of days remaining.

Let’s look at an example:

TV Purchase: $800 total

Date of Purchase:
1 month, roughly 30 days

800 divided by 30

You need to save about $27 / day to reach your goal

Saving almost $30 a day might not be doable for some and may be simple for others. Just be realistic about what you can save and adjust your goal date to better reflect your budget. You may need a couple extra weeks to save and that’s alright - the point is to figure out what works for you. If the goal date is fixed, then it’s time to look at other opportunities.

In what other areas can you cut back?

In Canada, 65 per cent of people get their daily Double Double at Tim Horton’s or latte at Starbucks. Figure in the average three cups of coffee drank each day, and you’re spending about $10 a day just on coffee. In one month, that’s around $300.

By making coffee at home, you’re looking at an average cost of anywhere between 11 cents a cup to $1.80 a cup for the good stuff. Average that out to 95 cents a cup, three cups a day, and you’re saving a minimum of $7 a day.

Besides your coffee, what other ways can you scale back? Prioritize what’s important to you and go from there. If you’re not the world’s best cook, you may be spending a lot of time in the drive-through. While cheaper than restaurants, the costs of fast food can add up - and not just for your wallet. Look for less expensive, healthier food options like store-bought prepared meals that don’t require kitchen capabilities outside of working the microwave oven. If you already eat most of your food at home, plan your grocery list in part based on that week's coupons and sales items.

By taking a close look at your last month’s purchases (either through online banking or paper statements), you will get a pretty clear picture of where your unnecessary purchases are happening. That, and a little education on overspending, will help you save in places you never knew possible.

Get creative: How can you save on the actual expensive purchase?

Depending on why you’re saving, there may be an opportunity to lower costs of the purchase. One option is, of course, to buy used. Whether that’s electronics, appliances - or really, just about anything - there’s a used website to search. Here are just a few of the top options throughout Canada:

If you’re looking for a service, such as washer/dryer repair, clogged plumbing, or gutter cleaning, doing research on the right contractor or company for the job can end up saving you more than a few loonies. Use services like to easily find the pro you’re looking for and get quotes from multiple businesses to help drive down the costs.

There also may be alternative low-to-no interest payment plans available on the product. If you look into the rent-to-own or lease-to-own route, make sure to check out all the fees to determine final costs. If it’s significantly higher than actual cost, it may not be worth it.

Make sure to discuss payment options and available products with the company from which you’re purchasing.

How Do You Stay On Track with Your Savings Plan?

There’s no doubt about it: saving is hard, and spending is easy. The trick to staying on the saving path is to instill a few habits that encourage you to keep up the good work.

One way to stay disciplined is budgeting. Once you figure out what your expenses are each month, like food, utilities, rent, prescriptions, and mobile data needs, you’ll get a good idea how much disposable (leftover) income you have. Next, set aside a weekly budget that you take out of the bank in cash. Once you spend the cash, you’re done. You might go so far as leaving the debit card at home when you go out - whatever works to keep your spending in check.

There’s a side effect to saving up the money for your big purchase that we didn’t mention: You’ll feel great knowing you did it! Planning for expensive purchases you know are coming could end up saving you some cash. If the time comes that you need a little extra help getting to the next paycheque, look to 310-LOAN to help you with life's unexpected moments.

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