by Maria Papadopoulou

Created on: March 10, 2010

In order to save money for a big expense you need to both earn more and spend less. This may seem too difficult considering the financial hardships we all have to endure during recession, however if you create and follow a specific plan, mission can be accomplished. There are ways to manage your finances efficiently, even when trying to save money for a big purchase.

Tips on how to save money for a big purchase

1. Create a separate savings account

Create a separate savings account through your regular bank, to deposit money for your big purchase. What will make things easier is to  make an arrangement with your bank to withdraw automatically a certain amount from your checking account per month and deposit it directly to your savings account.

2. Take a second job temporarily

In order to reach your goal faster, it is wise to take a second job temporarily. Depending on your other obligations and the free time you have, maybe you can babysit the neighbour's kids at the weekends, or work at a fast food chain a few days per week. If for some reason you prefer working from the comfort of your own home, maybe you can start freelancing. For example, if you have a flair for writing, maybe you can start searching for  freelancing writing opportunities. If you have a flair for languages, maybe you can start searching for translation jobs.

3.  Work overtime

If you have the option to work overtime and you are able  to make some necessary adjustments to your daily schedule, then go for it. Perhaps this is the fastest way to earn some extra cash.

4. Cut back on unnecessary expenses

In order to save money for a big purchase, increasing your income is not enough. What is equally necessary is to also cut back on unnecessary expenses, so to as to spend less money. Make the most of public transportation or even your bike (if you have one) on a daily basis. Prepare your coffee, snack and lunch from home and bring them over at work instead of purchasing from coffee houses, vending machines or even ordering takeouts. If you want to go out, then make the most of free entrances to theaters, movie theaters, concerts, galleries or museums.

5. Stop using credit cards

When trying to save money for a big purchase, it is safer to stop using credit cards and start using only cash, as that way you will able to get a better handle of the exact amount of money that you spent. With credit cards it is easy to overspend, as you know that you don't have to pay the full amount right away.

6. Be patient

It might take  longer than you have originally planned before you are ready to proceed with a big purchase.  For example, along the road you may decide that you need  a laptop with more functions (and therefore more expensive). That  could mean that you will have to wait 3 or 6 months or even a year more to save the money you need.   If you are expecting a tax return, then you will be able to save even more for your big purchase.

The above tips on how to save money for a big purchase, will help you manage your finances more efficiently.

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