How To Save For Something Big

Do you find it difficult to save money? You're not alone, a growing number of millennials have no savings at all. I know that for me personally it can be daunting trying to save up for something big. You see the big number and immediately think that you can't do it, but I want to tell you that you most certainly can and I can tell you how. Read on if you want to learn how to save for something big.

The first thing you need to do is work out a monthly budget. If you sit down and go through your bank statements you will be able to put together a list of your monthly outgoings and expenses and tot up how much you spend each month on variable items such as eating out, petrol and groceries. Once you have this list you will be able to work out how much 'spare' money you have each month. The CFPB has a great article on how to create a budget and stick to it.

Next you need to work out how much you will need to save each month to reach your big ticket goal. So, for example if you want to save up £25,000 for a house deposit within the next 5 years you will want to know how much you will need to put aside each month to meet that goal. Pigly is a free to use online website with interactive tools and calculators that can make this calculation easy. Simply go to their Savings Goal Calculator, enter the figures into the spreadsheet and it will calculate how much you need to save each month in order to reach your savings goal in the set amount of time.

So if I put the figures into the calculator I can work out that I will need to save £406.51 a month to meet my goal within 5 years. The calculator is in USD but works for any currency as it is just the numbers you need to consider. The thing I really like about this calculator is that it is so quick and easy to do, and if you have any savings already or part way through you happen to have an extra lump sum to add to your total, you can easily recalculate it, either reducing the amount you need to save per month or adjusting it so that you save the same but your goal end is brought forward.

Once you have the monthly amount you need to save worked out, you need to go back to your budget and see if this is workable. If you don't already have enough 'spare' money in your budget to cover these savings you will need to reduce your budget accordingly. This might mean cutting back on your grocery spend, walking to work instead of paying to take the bus, not eating out etc. There are so many ways that you can save money each month and if you can manage to spend less and save more remember you will reach your goal much quicker.

It's always difficult sticking to a budget but if you have a big item goal in mind that you want to use the money for then at least you have something to look forward to. Every time you want to buy a take out coffee or buy an item of clothing you don't really need just imagine yourself driving in your new car, or sitting in the living room of your new house, or your girlfriend saying "yes" when you give her that shiny diamond. It will be worth it!