You will need another car someday. Maybe it will be 6 years from now. Are you saving enough each month to pay cash for that new ride? And how about the Holidays, insurance, and vacations? Are you saving enough each month for those items? Creating a plan to save up for multiple big-ticket items can be intimidating. How do you start? It’s actually fairly simple and straight forward. Let’s take just one item, car replacement, and create a plan.
- Decide how much a new car will cost. For this example we will say $8,000.
- Decided how many months from now you will need to replace your car. For this example we will say 72 months (6 years).
- Divide the cost of the car by the months until purchase. $8000 / 72 Mo = $111 per month.
- Create a line on your monthly budget labeled ‘car replacement’.
- Save $111 each month.
- In 72 months, pay cash for that sweet new ride!