MASTER YOUR MONEY

I’LL SHOW YOU HOW

Join Today

FAILING TO PLAN IS PLANNING TO FAIL: HOW TO PLAN FOR THE UNEXPECTED

So we all have purchases that come up that are out of the normal. Whether that be buying a new car battery because you accidentally killed the last one on a road trip (don’t ask) or having to buy a mattress because your dog peed on your last one. Although these expenses are different in type they’re both relatively large expenses (180 for the battery 500 for the bed) that came up unexpectedly. How should you plan for these type of expenses. Well that’s what we’re going to discuss today.

Emergency Fund

Your first line of defense when unexpected large purchases come up is to maintain an emergency fund. This is money that you set aside to never touch except when an emergency hits. That way when an emergency hits you’re prepared for it.  In terms of how much to save when you’re first starting it aiming for $1,000 is a good place to start but eventually you want to get to the point where you’ll have 3-6 months out expenses saved up.

Move Slowly

Your second step when you’re making a big purchase decision is to remember that it’s important to move slowly when it comes to purchasing. Why? Because when you drop a lot of money on a single item you want to make sure that you have spent the proper amount of time to research what you’re about to purchase so you can make sure that you’re purchasing a quality item and moreover that you are getting a good deal. Additionally, moving slowly ensures that you’re actually purchasing something that you need instead of something that you just want or that would be nice to have.

Cash or Credit

Ok so you’ve done your research. You found a quality product and you found a great deal on it. Now how should you go about paying for it?  Should you use cash or credit?  Well sometimes when you use cash you can use that to negotiate an even greater deal because after all cash is King. However, credit also has some advantages. The most important one being the fact that most credit cards extend the manufacturer’s warranty. So if a year after your warranty ends and your battery goes kaput. Your can call your credit card company up, have them honor their warranty policy, and be reimbursed the cost of the purchase. The only thing to remember is that if you’re going to put something on your credit card you want to make sure you have the cash to pay it off so you don’t have to pay out more money in the form of interest.

Leave Yourself Some Cushion

Lastly, you can’t your last dime on this purchase; you want to leave yourself some cushion. Because after everything’s said and done you still needed to have some money left over at the end of the day to take care of any future emergencies and to maintain your normal expenses. Your savings should never go to zero if you can help it. If what you’re purchasing completely wipes out your savings then it is either too expensive or you need to save more. Only if there is no other option should you deplete your savings. But most of the time there are other options.

 

MORE FAMILY TIME

HELPING THE POOR

SEEING THE WORLD

WHATEVER YOUR DREAMS ARE

Don’t Let your finances hold you back. Master  your money and make your dreams real.

#FinanceYourDreams

WHATEVER YOUR DREAMS ARE

Don’t Let your finances hold you back. Master  your money and make your dreams real.

#FinanceYourDreams

Join Today

Pin It on Pinterest

Share This