Today I will be talking about how to recover from large purchases. These past couple of months have been a bit expensive for me. I have been saving up for a harp for the past three years, and just this Feburary had enough money to purchase it. Even with saving up, this was a rather expensive purchase for me. The most I have ever spent was 400 dollars for a computer that was equally shared with my sister. Now this pedal harp is in the relm of 13,000 dollars. This probably won’t be the largest sum of money that I will spend in my lifetime, but it is for me at the moment. So here are the things that I am doing to help re-balance my net worth and some tips for you to help recover.
- Have a plan in place. Remember saving for something is one thing, but once that money is gone, make sure you have a re-balance plan in place after you spend that money. For example, say you were putting $200 in your saving account for a car. Now after you bought that car, you will want to put that same amount of money in either a emergency fund or retirement account. Do this until you save nearly that same about of money that you spent. That way you don’t lose money.
- Put any leftover money in your emergency fund. If you have spare money after you have paid all your bills put that money aside in a emergency fund. You never know when a medical, housing, or automobile emergency will arise and you will need money quickly and easily.
- Save money when you can. After an expensive purchase, it can be a good time to learn how to make your own coffee at home and order less take-outs. Even if you saved the money in your account, it is hard to see all that money disappear in a blink of an eye, so it is crucial that you also have a plan to re-save after your big splurge.
- Space out expensive purchases. This way, as touched on in tip number one, you have some capital save up for the future. While it is alright to save for many things at once, always have a timeline for purchasing and re-balancing. This is one of the reasons why you might need to have separate saving and checking bank accounts so that you don’t panic when a lot of money is drained from one account.
- Make sure you have everything accounted for once you purchase. When I was saving for my harp, one of the things that I overlooked was how expensive harp lessons were. Although I am good for a few months, it is good to save up in advance so that you don’t have to worry or think about having enough money for lessons. So that is what I am heavily saving for now.
I hope that these tip will serve you well, and that you will use them to your advantage.
Have a great day,