Making big expenses does not have to break your budget. If you plan ahead, you will be able to make the big purchases that are sometimes necessary in your life. You may want to buy a car or purchase a home or go on vacation. If you budget for these things you can stay within your budget.
Define What is a Big Expense
The first step is to define what a big expense is to you. Based on your income and lifestyle what price point do you consider to be a big expense? It could be $200, $1000 or $10,000. Or maybe you are just saving to buy the new car that you need. Or you are saving to purchase a home. Whatever the price point it should be based on your circumstances not on anyone else’s opinion.
Create a Deadline
The next step is to give yourself a deadline of when you want to make the purchase. Do you need to buy a new car, but you can wait 6 months? Or do you want to buy a house in the next two years? It could be as simple as you need a new computer in the next month. Whatever your deadline use that as a starting point to determine how much you need to save each month or within that timeframe. For instance, if you want to purchase a car in five months and it costs $2500, then you need to save $500 per month.
Next, check your budget. Do you have any extra funds that you can put towards this goal? Do you need to cut back on other parts of your budget to get to your monthly $500 goal? Or do you need to seek additional income sources to obtain extra money. Break it down further into how often you get paid, weekly, biweekly or monthly. Divide your monthly goal by the number of times you get paid to determine how much to save from each paycheck. Once you have that number you will have a clearer picture of how to make this large expense.
All in all, big expenses can be part of your budget. If you budget for these expenses, it will make it less stressful. You will feel freer knowing that you have prepared and have the money to make the purchase. View your budget as a tool and not as a limitation.