Staying in control of your future means staying in control of your personal finances. Setting out long-term goals and putting in place short-term plans to achieve them can help you make the best possible use of your money.
So far, so obvious. But what happens when you need to make a major purchase? How can you do it without derailing the rest of the system for saving that you’ve so carefully put together?
Financial Goals
Start With Your Overall Budget
To begin with, you’ll want to have a budget in place. This should cover all of your costs and income, including everything from monthly bills to ongoing expenses like refuelling your car.
Once you have the necessary overview of your finances, you can work out how much you have to spend each week and how much you can realistically make available for large, one-off expenses.
Use Financial Tools to Compare Costs
The modern era provides us with many tools and calculators, designed to help drive down the cost of making a purchase like this. A car finance calculator, for example, might allow you to see what you can expect from regular monthly payments at a given rate of interest. Once you have a rough idea in mind, you can avoid being ripped off and make decisions that best support your financial objectives.
Look Beyond the Purchase Price
The fact that you need to spend big to keep yourself on the road (in the case of a car) or keep yourself working from home (in the case of, say, a computer) might lead you to justify putting yourself under financial stress.
What matters is that you’ve accounted for the full cost of the purchase, rather than just the list price. In the case of a road vehicle, the costs might include maintenance, insurance, and fuel. Think about how efficient the engine is, especially if you intend to take a lot of long journeys.
Get it right, and you’ll end up keeping your spending to a minimum, thereby reducing the chance of your financial plans being derailed.
Even if you have built up your emergency savings fund, it’s worth thinking carefully before relying on it to cover a major purchase. Using those savings could leave you exposed if an unexpected expense arises shortly afterwards.
Prioritise Purchases Around Your Financial Goals
Before you actually put money down, you should question whether the decision really aligns with your priorities and whether it’s really necessary. The reason you set out your budget and your goals ahead of time is so that you can keep sight of them whenever you’re tempted to spend. Will this purchase ruin your plans for a new house or a holiday this summer? If so, is the sacrifice worthwhile or avoidable?
Review the Decision Before Committing
It’s easy to be impulsive when you think that you can afford to make a purchase, especially if the item you’re buying is a high-status, luxury item. For this reason, it’s worth acting to curtail your worst impulses. Give yourself a few days to mull the decision over. Even if you make the purchase, you might find that you have a right to return it within a certain window. Find out what that window is, so that you can exercise your right to return it if you have second thoughts.
Debz Louise is a plus-size blogger based in Yorkshire. Behind many nationwide campaigns such as #WeaAreTheThey & winner of Best Blogger at the UK Plus Size Awards, she talkas about life as a plus-size 40-something woman in South Yorkshire.
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