Making a large purchase such as a car or boat – or even a new flat screen television – does not have to mean you will be paying for it over the next 5 or 10 years. Planning ahead and taking the time to develop a roadmap to the purchase will allow you to use cash and not credit for large purchases such as these.

Here are a few suggestions on how to make a big purchase while simultaneously remaining debt free:

1. Decide on Your Exact Purchase: Do a little bit of research and identify the exact brand and model of the product you wish to purchase. Online shopping resources are a great way to compare and contrast various similar products. Be sure to select the product that best matches your needs and desires, and don’t make a decision on cost alone. The lowest priced version of anything is usually cheaper than comparable products for a reason. Double check reliability ratings and reviews from people who have purchased the model in question to make sure there is not a reliability or performance issue.
2. Establish a Baseline Cost: Find out the average cost for the desired product to identify exactly how much you need to save for the purchase. Often you will find a variety of prices for the same product, and you should set your baseline cost somewhere in the middle. For example. If that new car you are thinking about ranges in price from $25,000 to $28,000, you should set your baseline cost at $26,500 to ensure you have enough when it comes time to make the purchase.
3. Establish a Timeframe and Monthly Savings Amount: Put a calendar date on when exactly you plan to make your purchase. This will allow you to divide the cost of the product by the number of months you have to save towards it. Let’s say you want to buy a $1,200 (remember that baseline price?) flat screen television in the next 6 months. 1200 ÷ 6 = 200, therefore you will need to put aside $200 a month for the next 6 months.
4. Automate Your Savings: Consider automating your savings so that a portion of your income, or the monthly savings amount you established in Step 3, are placed into a separate account automatically on payday. This will make it easier to save the necessary amount, and will reduce the likelihood that you will use these funds for other purposes.

So take the time to plan ahead for your next big purchase. It could mean the difference between paying off the purchase for years to come or saving money to use towards your next big purchase.

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