by Ann E. Smith

Created on: November 11, 2009

It's important to live within your means, as it will give you greater peace of mind. Being financially responsible has countless rewards, and it is completely doable.

If you are on the path to be more in control of your finances, consider buying things when you can afford them. For big purchases, such as cars or stereo systems, you will need to save money well in advance. The more cash you can put down up front, the better off you will be.

Below are a few tips on how to save money for a big purchase.

* Set up monthly automatic transfers into savings

Create a separate savings account just for big purchases. It can also serve as a nest egg for you.

If you do online banking, it's easy to create an automatic monthly transfer. You can have $200 transferred from your checking account into this savings account on the same day you are paid.

With this transfer taking place before you even see the cash, you may be surprised at how quickly you build up a solid amount of savings.

* Find ways to cut back on your monthly expenses

Let's say you want to save money for a dream vacation. And you hope to take this vacation in six months.

Figure out how much money you need for this trip. Then divide the total by six. That will provide your monthly goal for savings - just for this vacation.

One way to find this extra money is to cut down on monthly expenses. What are you willing to sacrifice to be able to come up with this monthly savings amount?

Perhaps you can cut back on your mobile phone plan. Or you can commit to dining at home versus eating out so often. When you look for ways to spend less and save more, you can usually find them. And the big purchase for which you are saving may serve as a really good motivator.

* Consider ways to make extra income

Sometimes when people want to buy something big - like a new car - they take odd jobs here or there. These jobs are in addition to their regular work.

Ask yourself some ways you could make extra money? Perhaps you could wait tables on the weekend. Or you may enjoy babysitting for kids in the neighborhood.

Be creative, and you may come up with some great ideas for making more disposable income. You can then contribute this income to your savings account.

* Make investments

While many investments are more profitable over the long term, you may want to consider some shorter term options. Explore various ways you can invest and grow your money. Perhaps some of the surplus can go toward purchasing a big ticket item.

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