Working World

Saving for life’s biggest purchases is never easy. Whether your goal is to buy a house, a car or take a vacation to Italy, you’ll never reach it without a little hard work and a whole lot of sacrifice. It’s unlikely you’re going to save enough for the down payment on a house by skipping your daily latte alone.

No, it takes more than that when it comes to saving for once-in-a-lifetime trips or big ticket purchases, especially if you’re hoping to reach those goals in a certain timeframe. When cutting back on minor expenses isn’t enough, it’s time to step it up and take your plan to the next level.

Here are a few tips to getting on track for big-time saving:

>  Set a Deadline
The first step is to decide when the nest-egg needs to be hatched. If you don’t expect to reach your goal for five years, it may be worthwhile to set a few mini-deadlines along the way.

> Be Specific
People who set specific goals are more likely to succeed than those with generic, lofty aspirations. So rather deciding to save for your dream house, decide specifically how much you’ll need for a down payment, divided by the number of months or weeks until you wish to buy. This is the amount you need to either accumulate from cutting expenses or by increasing earnings.

> Open a Separate Savings Account
If you’re someone who struggles to stay organized, it may be worth setting up a separate savings account to specifically house this goal money. Online banks like ING Direct and Ally allow customers to create accounts in minutes, and you can view your progress by logging on at any time. Plus, it reduces the temptation to dip into this account to pay the rent.

> Make One Major Sacrifice
Brown-bagging it for lunch is a great way to save money, but alone it won’t add up to a big ticket purchase. Decide for yourself what you’re willing to give up to achieve your dream, whether that’s selling your car and taking public transportation, finding a roommate to split the rent or working a second job.

> Freelance on the Side
Do you have a talent or skill that’s not being utilized? Whether you’re selling crafts on Etsy or creating websites on the weekends, use the skills you’ve already got to make some extra money to go into your bank account.

> Review Your Insurance
Check out any alternative plans your company offers. Do you really need to pay for vision coverage if you don’t wear glasses? Is it worthwhile to pay more for the PPO when an HMO is an option? It’s up to you. But doing the research and making these decisions is one smart step on the path to reaching your ultimate savings goal.   

Stephanie Miles an award-winning journalist who has been writing about personal finance and real estate since 2006. Find her online at stephaniemiles.com.