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Saving for an Engagement Ring

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you can afford IVF, a new baby and a car upgrade

Entering an exciting new phase in our lives often means adjustments across our entire lifestyle, including how we spend or save our pennies...

Today we have another instalment of my new ‘savvy savers series’, where I chat to real people about real life situations where they have had to rethink their spending or savings strategies in order to accomodate big ticket items or changes to their financial circumstances.

This week I chat to George* about how he saved up for a bit of bling and some time away to pop the questions to his girlfriend.  George shares how how he made a few changes in his day to day life in order to enter the next exciting phase of his life: 

Q: What has been some major expenses over the last 12 months? 
A: Over the last 12 months my biggest expense was the engagement ring. This was followed by my recent trip to New Zealand where I popped the question!

Q: How have your prioritised these larger expenses? 
A: Paying off the ring was a priority of mine. The jeweller I purchased it off took roughly a 30% deposit upfront. The rest was to be paid off interest free within 6 months. However, as I had paid a bit more for the ring then I had budgeted for I negotiated a 9 month period to pay off the ring just for peace of mind. With a time frame in place you can then figure out how much you need to save each week to meet the commitment. 

Q: What has been your savings strategy? 
A: Having a budget in mind is a great way to start. Figuring out exactly what you are comfortable spending on a big ticket item and then calculating exactly how much a week you can allocate to saving towards it. As I only paid the deposit upfront I had exact numbers to work off. X amount of dollars to pay off in X amount of weeks. However as I wanted to pay the ring off as quickly as possible I tried to save as much as I could each week. This was done by calculating my weekly expenses such as rent, food, bills etc, and pretty much allocating all the rest towards paying off the ring. I ended up paying it off with the 6 months easily as I saved hard.

Q: What have you gone without? 
A: I cut down on small purchases that add up quickly. I was having 2-3 bought cups of coffee a week which easily adds up to $15 a week. We also ate out less and cooked at home much more often. Bringing a packed lunch to work instead of buying lunch at work can also have a big impact on your weekly savings.

Q: What have you done differently? 
A: Just being conscious of my spending helped me save much more quickly. Asking yourself "do I really need this?" before purchasing something is a good habit to get into.

Q: Do you have money go into your account via a direct debit or do you manually transfer funds into your savings account?
A: I have a debit account and a savings account. My fortnightly pay goes to my debit account and then I manually transferred all of my pay minus expenses into the savings account. Some fortnights I was able to maintain the amount I transferred into the savings account and other fortnights I had to transfer some money back if I over spent due to unforeseen expenses. 

Q: Did you get help with budgeting? 
A: No I didn't get any help with budgeting but I as I look forward to saving for a wedding, a honeymoon and a deposit for a house, it is so clear to me to see the importance of budgeting. I wish I had been more budget-savvy in my earlier years however it is never too late to start. I even recently purchased a book called 'The Barefoot Investor' which is a down to earth insight at saving and investing your money. I am only part of the way through but so far it seems as though the overall concept of the book is that a few simple changes to what you do with your money can have a big impact on your financial well being.

Q: What advice do you have for others saving for big ticket items? 
A: It can be daunting thinking about how much these things can cost, especially when your current savings account looks as bare as the fridge in your share house during your uni days. It is important to not let this overwhelm you and to keep a positive outlook. Don't tell yourself "Oh I will never be able to afford that, there is no real point saving" or "I will worry about that down the track, no point saving now". No matter what your own personal circumstances there is always a way to make some sacrifices and start saving. Make a plan a stick to it. Make your savings goal a SMART goal; Specific (what am I saving for and how much will I need to save?), Measurable (so you can track your progress and make any necessary changes), Achievable/Realistic (don't set the bar too high if there is no way you will be able to reach it, be realistic with your savings) and keep a Timeline (have an end date in mine, create a finish line for yourself). You will have set backs, you will have challenges along the way, that is completely normal but don't put it off, start planning today, tell yourself you can and before you know it you will be on your way to saving for one of those big moments in life. Happy saving!

 

*name changed for privacy reasons
 

Do you have a story or situation you would like to share with our community?  If you have some savvy savings tips you'd like to share in an interview (name will be changed) get in touch at info@endeavour.bank

 

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.