Thank you Capital One for sponsoring this post. All opinions are my own.
As 2017 approaches, I’ve been thinking a lot about my wish list.
You know, that list of big purchases I’ve always dreamed of making – a beach house in San Diego, weekly sessions with a personal trainer and a daily massage, (if I’m getting really fancy).
I’m at that age where my friends are starting to solidify their life choices – settling down with partners and committing to their careers. Which means they’re starting to make some pretty big purchases – new cars, first houses, even rental properties.
In fact, a lot of millennials are planning to make big purchases next year. Studies show that our boomerang generation is finally coming back out of the nest, buying cars and houses in record numbers.
So if you’re thinking of making a big purchase in 2017, you’re not alone.
Well you’re not alone in figuring that part out either.
If you don’t have experience buying something with a five or six-digit price tag, it can feel intimidating, even impossible. But it isn’t!
In fact, it’s totally doable. Here’s how…
Make a Savings Plan for Big Purchases
While it’s easy to say we’ll save up for a big purchase, too often we fail to plan how we’re actually going to do it. We end up in a cycle of putting a few hundred bucks away, then pulling it back out again in a pinch.
The first step in making any big purchase is creating a realistic savings plan.
For example, if you want to buy a new car by September 2017, you have 10 months to save for it. If you need $5,000 for a down payment, you’ll have to save $500 a month.
So, you’re either going to have to earn extra $500 a month, or cut $500 somewhere in your monthly spending (or maybe a combo).
Either way, it’s time to crunch some numbers.
Start Cutting Back NOW
The holiday season is a great time to get ahead of your goals before the New Year; however, this means avoiding maxing out your credit cards buying gifts for distant relatives.
If you are planning on making big purchases in 2017, think about how you can cut back during the holidays (i.e. right now) to make those purchases possible.
- Have a realistic talk with your family about what you can afford for Christmas presents this year. Let them know that you’re cutting back because you’re saving for something important and you need their support.
- Don’t spend a second thinking about your holiday bonus – just put it straight into savings to finance your big purchase.
Ask for cash this Christmas and explain where it’s going. People love to help their loved ones reach big goals.
Figure Out Your Financing
As a New Yorker, I understand how far-fetched big purchases can seem.
When I think about buying a house, I am instantly transported into an alternate universe where charming East Village walk-ups are $250K and Oprah has asked me to host a talk-show. Totally possible, right?
But my Oprah dream aside…
When you break down big purchases into monthly cash targets, you begin to see that they’re completely manageable.
The key is to take a realistic look at your financing options so you know how much of a down payment you need.
If you’re planning on buying a new car, check out Capital One’s Auto Navigator® site. You can search dealer inventory, while also seeing personalized finance terms for each car. Use the tailored search features and filters to review multiple vehicles and various finance terms, including the APR and monthly payment based on down payment amounts and different term lengths.
Who knows – maybe your September purchase date can get bumped up as early as August or July?
Whatever you do, don’t underestimate the importance of proper financing.
A few more thousand dollars saved up and put towards a down payment can save you hundreds on your monthly payments. And a lower APR means more money in your pocket.
Make your big purchases in 2017 and maximize your savings by using the right tools like Capital One’s Auto Navigator site to search and plan!