Everyone likes to splurge here and there. It can be tricky when you are trying to balance and navigate all aspects of your finances. This guide will educate you on how to flawlessly save money for a big purchase while renting. It’ll also give you some tips on how to manage your finances as a whole while juggling monthly rent expenses.
Get Control of Your Finances
The first step you should consider is getting control of your finances. Doing so is important because you need to see where you stand financially before you dive into a large purchase. It will also help you understand the importance of being fully invested and active within how you manage your money.
Don’t be afraid to write down financial goals for yourself to help capture the big picture of what you’d like to achieve with your financial decisions. This way, you’ll be able to map out what you are looking to spend, save, and learn during a specific period of time. Take into consideration your current paychecks, what’s in your savings, and where you want to be a few months from now. Now’s the time to think about where you are in your lease and if your rent will increase in the near future.
From there, figure out how you can hold yourself accountable to good spending habits. Avoid swiping the credit card for unnecessary items, increase the amount of money you take from your paycheck to your savings account, pay your bills on time, and list out monthly spending needs.
Writing out where you are spending money will allow you to see where you can set limits or splurge a little more. While listing everything out, remember to factor in your rent, utilities, credit cards, monthly service payments, car expenses, and so on. Include monthly payment dates on your list too so you can see when the money is withdrawn from your account. If you are nervous that you will lose track of payment dates, consider automating your payments. That way, you will never miss a deadline.
When you are committed to saving up for a big-ticket item, you will see your spending limits will change, which means more money saved. This won’t be for an extended amount of time, but only until you have reached your money goal for the purchase. Making successful and smart money moves will keep you on track as a renter. Once your goals, habits, and limits are made, it is time to re-evaluate your current financial situation.
After reflecting on your spending habits, financial goals, and budget, there are additional ways you can increase your cash flow, such as with student loan refinancing and investing. Depending on where you’re at in life, it may be a good idea to refinance your student loans. Refinancing your student loans can save you quite a bit of money with a lower interest rate, reduced monthly payments, and more! Not only that but it can also allow you to pay off your loans sooner rather than later, giving you a sigh of relief.
The process of investing is also a great strategy for someone who is looking to save money. This will allow you to build up and allocate funds for a later date. This may not only help you save and make money, but it can help secure your financial future as well.
Taking an even deeper look at where you are consistently spending your money can also be an effective way to save money. If there are services you no longer use or need anymore, cancel your subscriptions or memberships. This will give you extra money to put toward your expensive purchase or get ahead in next month’s rent so you free up some monthly cash. A great place to look for these is within your inbox. Subscription cancellation messages can hide within the bottom of a company’s email, so when searching make sure to look there.
Whether you are working remotely in your apartment and plan to buy new furniture for your office, or you’re purchasing an engagement ring, or even looking into a more luxury car, it’s best to do some research first and foremost to compare prices and quality. Look at competitors and shop around to see where you can find the best deal and save them either in a note or folder on your device so you have them to reference before making the final decision.
You’ll also want to learn about how much you’ll have to dish out upfront. Sometimes you have the option of paying in installments, so you may not have to save all of your money for the item right away. If that’s the case, make sure you have a savings goal for the down payment.
After you’ve reviewed your current financial situation and have done research on costs, you’ll want to figure out different ways you can achieve your savings goal. This can be as simple or complex as you’d like. You can plan to save weekly, bi-weekly, or monthly. This will depend on your timeframe and overall goal.
Some ways you can save are:
- Putting more money into your savings account directly from your paycheck
- Creating a completely separate savings account so you aren’t tempted to touch it
- Every time you pay rent, deposit a small amount in your savings account so you are contributing regularly
- Check to see if your landlord will let you pay ahead for a few months. That way you’ll eventually have a month off and extra cash in your account
- Developing a spreadsheet where you track how much you’ll save each week
- Using a money jar
- Using the envelope money-saving trend
Whatever trick you choose, try a few to see what works best for you!
You are now ready to start planning for your big purchase. Following these steps will ensure that you will stay on track with your finances while still paying your rent and other necessities.