Page 65 - Book3E

CHAPTER 10
How to Budget for a Major Purchase
In order to budget for a major purchase such as a down payment on a home, a car, or a household appliance, you first need to get a handle on your expenses. A good way to see how much money is coming in to your household and how much is going out is to bank online. Have your paychecks directly deposited into your checking account and use the Internet to pay bills from that account. Also, building up your savings is made a lot easier by having a percentage of your earnings deducted automatically from your checking account into a savings or brokerage account. You won’t miss the money, and you’ll be surprised how quickly the savings accumulates. Banking online will help you keep a running tally of what you are spending and saving.
One of the smartest and most effective ways to have money on hand for periodic expenses is to get in the habit of “paying yourself first”—or putting some money in savings as soon as you receive your paycheck. It’s difficult to save if paying all of your other expenses comes first. Pay yourself (into a savings account) first and then pay your other bills. Saving may never be easy but it can become a habit. Surprisingly enough, you can become wealthier in the process.
It’s safe to say that budgeting and saving for a major purchase takes patience and planning. Resist the tempting TV and radio ads to “buy now, pay later.” While a major purchase such as a house, car, or house- hold appliance can place stress on your checkbook, budgeting and saving for the purchase can often ease the pain. Here are some simple steps to follow:
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