Saving for large purchases

Farm Forum

Traditionally when we think about saving for a large purchase we think about saving for a car or a home. But there are other short-term and life event purchases that could fall into this category. For example, a new computer, a vacation, or a wedding could fall into the large purchase category.

No matter what you are saving for, the way to achieve your goal is the same:

· Set a goal. Decide what you want to save for.

· Make a plan. Determine how much you want to save a month and for how long.

· Save automatically. Set up direct deposit or put part of your pay plan into a savings account automatically each month.

Strategies for saving:

· Build adequate emergency savings – before you begin to save for any large purchase, make sure you have adequate emergency savings. You don’t want to have to dip into your large purchase savings to pay for an emergency.

· Pay yourself first – once you have set your goal and made a plan on how long it will take to reach it, have that put automatically into a savings account by direct deposit or an automatic transfer from your checking account.

· Keep your savings safe and protected. If you are looking at saving for a few years, consider using a CD, a savings bond, or a 529 account (for college savings). These generally earn more than a savings account but also have limitations to when you can access your funds. Some large purchases take less time to save for such as an appliance, computer, or vacation. Consider putting your money into a savings account for these as your money will be safe and secure and accessible at any time.

Reach Karen Slunecka at 605-626-2870 or