Purchasing an expensive item that took months, or sometimes years, of saving is a rewarding moment.

Building a savings account for big purchase spending is one financial goal that can make a difference in short and long-term success. People commonly refrain from spending a portion of their income on big purchase spending items, such as a car, housing and college tuition. However, saving for those expensive items can remove the guilt from the purchase.

This savings account should be separate from one that is used for investing. Although investments are also for long-term financial goals, the intention behind the practice is to grow money by contributing to stocks, bonds and other avenues. This account is focused on preserving funds for a big purchase spend.

Saving for big purchases can seem overwhelming at first. However, there are smart ways to save that can help the process feel more doable. One of the first steps is understanding the value behind a large purchase and determining if it’s worth saving for.

Gen Z financial educator Mykail James shared with 21Ninety her top tricks for practicing long-term saving.

Initial Factors to Consider

James pointed out the first consideration is figuring out the longevity and usefulness of the big purchase. Estimating its “use” factor clarifies whether the item is an impulse buy or a need. Drawing the line between the two sets is the foundation for greater financial success. It evaluates its value and provides clarity on its purpose. 

Through the assessment process, it’s also essential to consider the hidden and long-term costs associated with the purchase. Understanding the ins and outs of what you’re committing to goes beyond seeing the price tag attached. It is crucial to read the fine print because it could potentially contain additional fees that accrue over time that aren’t blatantly advertised. Additionally, James said to consider other details, such as inquiring about more cost-effective options and payment methods.

Prioritize Your Savings With Debt

Debt is easy to accumulate, and it can be harder to plan for the future with present expenses. James suggests taking it one step at a time.

“Choose one main financial goal and work towards that,” James told 21Ninety. “It may be overwhelming to make significant financial changes all at once, but if you take the time and focus on ways to improve one area of your finances, the other areas will improve as a result.” 

Saving for big purchases requires planning, which begins with creating a savings goal with action steps. Financial experts refer to SMART goals as a viable financial plan. The acronym stands for specific, measurable, attainable, relevant and time-bound. Filling in these categories beforehand helps put a person’s financial goals within reach. 

While it may seem outdated, coupons are another way to help save money by only paying part of the full price. James also mentioned knowing the best season or time period to buy a specific item can have an impact. Looking at an industry’s market or recognizing the seasonal patterns where cost may be lower are contributing factors that affect a savings plan.

Achievable Ways to Be a Disciplined Saver

Discipline is key to seeing your money grow abundantly. James’ biggest advice is to create a separate bank account with a different bank. One would be used for spending and the other specifically for savings. Distinguishing the two accounts removes the temptation to dip into one’s savings. 

Her final tip is to automate your finances. This strategy increases your savings by making it automatic. Your savings will effortlessly grow from specifying a specific amount of money to be deposited each month.