Have you thought about how to fund significant purchases?  What is considered a significant purchase?  It’s a purchase that could have a huge influence on your finances.  It could have a huge price tag, a long-standing obligation, or meaning in your life.

Examples could include a vehicle purchase with a long-term loan.  It could be a purchase of major appliances and/or furniture.  A significant purchase could be an expensive vacation or wedding.  Another example could include medical expenses that your insurance didn’t cover.  Or, you may want to buy a house down the road.

In your budget, a significant purchase could be anything not considered a regular monthly expense.  It’s usually something that you and your partner (assuming you have one), would decide on jointly.  It requires saving or planning for ahead of time.  Holiday shopping could be included as another example.  Some consider auto repairs as significant purchases.  But you can set aside money in your monthly budget to save up for anticipated repairs.  You can do the same with home repairs or remodels.  I just did that.

It is recommended that before you spend money on significant purchases, you wait at least 24-48 hours.  That will prevent any impulse purchases.  Do comparison shopping both online and in stores.  Make sure your emergency fund is fully funded and check your budget to ensure you can afford paying for it.  Do NOT buy significant purchases using credit.  Finally, if you know you need something down the road, save for it. 

Moral of the story:

Significant purchases do happen.  After all, your dryer may only last so long and will have to be replaced.  Plan ahead and save for these types of expenditures.  You don’t want to dip into your emergency fund if you don’t have to.  Significant purchases will happen over time.  Act like a Boy Scout and be prepared.