college budget – GradGuard Blog

Addressing Finances as a Student

February 4, 2022

College is one of the best times of your life: you’re always meeting new people, are regularly exposed to new and revolutionary ideas, and will make memories that last a lifetime.

However, college can also be challenging. As a student, you’re always juggling responsibilities and are constantly aware of the costs like school fees, books, food, and accommodation.

These responsibilities can lead many to put their head in the sand during their college years and ignore their finances. But this approach is unlikely to alleviate any financial anxiety you might feel, and will only inflate your debts when you graduate.

Instead, you should take a forward-thinking approach to budgets, expenses, and income — here are a few tips to help you along the way.

Budget

You cannot address your finances properly without a clear budget.

You can create a realistic budget by adding up all of your income and expenses. This can be tricky, as most students who are also working are on hourly contracts which might fluctuate around seasonal shifts and finals. You can either account for these fluctuations ahead of time, or should set a “minimum income” amount so you’re never caught out.

Next, you should divide your expenses up into essential and non-essential expenses. Essential expenses should cover any non-negotiable fees like rent or food, and non-essential expenses should include cash for good times (we’ll get to that later!).

Once you have a clear picture of how much you expect to earn and spend every month, you should start to think about how you can make your money work for you through investments and interest on savings — but only after you’ve established a healthy emergency fund.

Emergency Fund

An emergency fund protects you from unexpected fees like medical bills or car maintenance fees. This might sound boring, but it’s essential if you wish to have financial security and peace of mind.

Determining the size of your emergency fund depends on your current context. However, in general, you should budget to cover at least three months’ worth of expenses in case you lose your job or are hit with an unexpected bill.

Transport

Cars are money pits. You can easily spend hundreds, if not thousands on simple repairs, and cars require consistent tax and insurance payments. As a student, you should seriously consider ditching a car until you have a reliable source of full-time income that can support your vehicle without putting an extra strain on your budget.

It’s hard to know if life without a car is right for you, and you should consider factors like your proximity to campus and access to public transport before you list your vehicle on craigslist. However, there are serious health benefits to going without a car, as you’ll likely cycle or walk far more than you ever did before.

Good Times

A budget isn’t a spreadsheet that exists to make you feel guilty. A good budget should allow for a little flexibility around travel, food, shopping, and socialization. As such, it’s a good idea to set an affordable amount aside to pursue good times and memorable experiences.

As a student with fewer commitments, you should seriously consider spending the money you budget for good times on summer travel plans. Summer vacation will help you see the light at the end of the spring semester tunnel, and will give you a chance to make meaningful connections with the people you’ve met while studying.

Conclusion

You can’t achieve financial independence overnight — but that shouldn’t put you off from making proactive financial choices that are based on a clear budget and some forward-thinking. That might mean you need to ditch the car for a few years, but it will also give you the flexibility to spend a little extra on summer vacations or road trips with your new friends.

Student Life

Budgeting Tips for College Students

July 18, 2021

Budgeting can be a tough code to crack for anyone, including college students. That’s because it’s more than just writing a list of your upcoming expenses. It’s the complex art of tracking and managing your finances.

In this article, we are going to list down the different tips we have for college students on how to create a successful budget.

Differentiate Between Needs and Wants

The experience given by a couple of decades of adulthood is invaluable in determining what needs and wants are. However, college students don’t have that kind of insight yet. Some items can be easy to determine as a need: rent, utility bills, academic expenses. But what about the other things? Coffee, books, your weekly stress-relief party. Aren’t these things needs as well? Here’s a tip: list down all the expenses that will really put you in serious trouble. Unfortunately, unless you’re in the business of coffee retail, that might not include your latte runs.

Calculate Your Net Income

The next thing that you should determine is how much you’re earning. At the very least, you should ensure that it will be enough to cover all your needs. Otherwise, you will be forced to consider one of the three options:

Are there needs that you can live without?
Is there a way to increase your earnings?
Is there an item in your budget list that you can further reduce? For instance, you can save money on groceries by using student discounts, coupons, or buying generic brands.

List Monthly Expenses

Once you have made your calculations, you can then move on to create the outline of your budget starting with your monthly expenses. There’s no need to make your list look aesthetically perfect. Just make sure that you don’t miss an important item. It would be a shame to complete your monthly budget and forget to list down, say, your internet bill.

Organize Your Expenses into Fixed and Variable Categories

Expenses can further be organized into two categories: fixed and variable. As the name suggests, fixed expenses are those that don’t change (at least, very often). For instance, your tuition, monthly rent, and bills will remain constant until rates increase. Meanwhile, variable expenses are those that change rates frequently. These typically include your wants. For instance, you might have increased your clothing budget last month to make way for the restocking of your favorite online shop. That might mean that you won’t need to budget a lot for your clothing expenses this month.

Determine Average Monthly Costs for Each Expense

Finally, you’re almost ready to determine your monthly budget. This is going to serve as your baseline goal for your monthly income. Feel free to determine the average monthly cost for each expense. Why? That’s because even if you spend more for some of your variables during certain months, this doesn’t mean that you shouldn’t save for them during their “off-peak” months. Doing so will make “peak” months easier to bear.

Make Adjustments

Finally, don’t stop there. As we’ve mentioned above, budgeting is a complex art of constant tweaking and re-tweaking. Eventually, you’ll have to account for other finances, especially if you want to expand and increase the quality of your life. Saving is very important too. We recommend listing savings under fixed needs. You should account for your future investments as well.

There are a lot of things that you can experience while you’re in college. You should definitely make the most out of it, but there’s no need to go broke. Learning how to budget your finances today will also help you deal with the massive debt awaiting you after graduation: your student loan. Good luck!

Health Other

How Being Eco-Friendly at College Can Save You Money

July 10, 2020

Embracing a greener lifestyle is a great way to improve your carbon footprint and help leave a positive impact on the world. But did you know that it can actually save you money, too? Here are some easy ways you can benefit financially from a more eco-friendly college experience.

Avoid Single-Use Anything

If you haven’t already, it’s time to ditch the plastic water bottles and to-go coffee cups and opt for a more sustainable option. Every single minute, the world uses one million plastic water bottles, so do what you can to help cut back on that. Take it a step further with reusable grocery bags and avoiding disposable utensils.

Temperature Control

One of your sneakiest expenses can be hiding in your utility bills. Bouncing back and forth between temperatures can be costly, as well as bad for the environment. During warmer months, you’ll probably be tempted to crank the AC in order to stay cool. Instead of turning down the thermostat, you can keep your room cool without using as much energy by getting blackout curtains. You should also make sure that you’re only turning the light when you’re in the room and need it on. Check your air vents, or talk to your landlord or property manager, to make sure they don’t have any dust or debris buildup that could hinder your home’s cooling efficiency.

Go Digital

Instead of taking notes on paper, try using your laptop or tablet instead. Not only will this save paper, but you’ll be spending less on notebooks and pens. You can even voice record your lectures and listen to them later on.

Change Your Commute

Consider riding your bike to work. Not only will you incorporate a fun workout into your day, but you’ll also be helping to relieve stress. It can also help you save money on transportation expenses like gas and auto maintenance. If a bike ride doesn’t work for you, look into other options like carpooling or taking public transportation.

Re-think Your Textbooks

Tired of expensive textbooks that you’ll never use beyond that one course? Look into used book options! Many websites and local bookstores offer buy-back programs on previously-used books. Not only will this help you save money in the beginning, but it also gives you the potential to earn money back once you’re done with it. Another great option is to use digital versions of textbooks. Oftentimes you can buy downloadable copies right from the publisher, for pennies on the dollar of what the paper textbook would cost. An added perk? Many of these include updated annotations or dictation, so you can better follow and understand the content as you go.

Get Thrifty

Why pay full price on anything when you can get great items for a fraction of the cost? Whether you’re looking for a quirky piece of furniture or new clothing, you can find just about anything in thrift stores if you look hard enough.

Turn it Off

Turning off or unplugging electronics that you’re no longer using is one of the easiest ways to curb your use of power. Hit the lights when you leave a room, and unplug chargers when you’re done using them. Then take it one step further and cut back on your water usage while you shower, brush your teeth, or do the dishes.

Working towards a greener lifestyle doesn’t have to be an overnight thing. It’s a process, and it’s okay to take as much time as you need to ease into it. Making small changes through the day can lead to lasting effects down the line that your planet, and wallet, will thank you for.

Adulting Other

5 Major Spending Mistakes and How to Avoid Them

June 5, 2020

As a college student, socialization can come with the unfortunate downside of being fairly expensive. Going to bars and clubs, shopping for an outfit for a night out, or even just ordering food with friends can all be costs that add up quickly.

In order to save more money on a tight budget, read on for common spending mistakes and what you can do to avoid them.

Not Planning

Planning ahead is one of the best ways to avoid overspending. By having a set idea of what you need ahead of time, you are placing a limit on what you can and cannot buy. This can be beneficial, as it helps you set your mind on what exactly you need to avoid distractions. As a smart shopper, take the time to create a shopping list and a strict budget that’s associated with it.

Taking on Fees

Many spending sprees can be bogged down by hidden transactional fees. Credit cards often have excessive interest rates associated with them if not paid off in time. Similarly, paying directly from your bank account puts you at risk for paying overdraft fees if you aren’t keeping a close eye on your spending.

One way to avoid this is to pay in cash, which also helps prevent overspending. If you’re someone more inclined to pay with a credit card, make sure you are aware of all the fees associated with the card you’re using. Similarly, if you’re in favor of using a debit card, find an account that has overdraft alternatives in order to avoid even more additional costs. Ultimately, this can keep you from taking on unnecessary fees if you do happen to spend more than what’s in your bank account.

Making Extra Purchases

Even with a budget and shopping list in place, there’s still a chance you might overspend on things that you don’t necessarily need. When shopping, it’s important to avoid impulse purchases and only focus on the list of items you’re planning to buy. Always stick to the plan you came in with, and if possible, avoid spending too much time looking at the smaller items available in the checkout aisle of many stores, which are designed to grab your attention, but probably aren’t the best for your budget.

Not Finding Alternatives

The shopping world is forever changing, due to sites like Amazon, along with other websites that offer coupon and discount codes for a variety of internet stores. There is an abundance of money-saving alternatives available for the savvy shopper. Therefore, it’s important to take your time when shopping, both online and offline. After all, the first item you find may be convenient, but also might not be the most cost-effective to buy. Spending extra time looking for alternatives could be what saves you more money than expected.

Indecisiveness

On the flip side of this, taking too much time to shop can hinder your ability to save money. This is because most discounts are offered for a limited time only. While there is value in taking time to shop around and find deals, it shouldn’t be done in excess. Instead, pick a few items, compare their prices and the coupons available, and go with the most cost-effective option.

Before your next shopping trip or spending spree, make sure to plan ahead, and be ready to look for deals that will help you save money and avoid some common spending mistakes!

Other Transition

Home Away From Home: Completing a Long Distance Campus Move

April 22, 2020

Long-distance moves are already stressful and exhausting, but when your destination is a college campus with a new dorm, a full class load, and an entirely new social circle, it can feel downright overwhelming. Here are a few tips and suggestions to keep in mind as you prepare to leave the familiar comforts of the well-known behind and launch into the geographically distant academic adventures that lie ahead.

Go Into Things Healthy

It’s a good idea to take some time before your big move to ensure that you’re in tip-top physical, mental, and emotional shape as you go through the rigors of a larger move. A few suggestions for ways to do this include:

Getting a checkup.
Sleeping well in the days and weeks leading up to the move.
Eating healthy food.
Exercising.
Meditating and/or praying on a daily basis.

If you can pursue health and wellness in the lead up to your move, you’ll be able to weather the drama and chaos much easier.

Pack Smart

When it comes to your move you may think you’re on your own. After all, none of your friends or family are likely coming with you to live on campus. But that doesn’t mean you can’t ask friends and family for help.

Pull the classic “if you come and help me pack I’ll get everyone pizza at the end of the day” pitch. This turns the event into less work for yourself as well as a fun opportunity for everyone to hang out one last time before you leave.

Plan Your Trip

Before you ever hop in the car or turn the key, make sure to carefully plan out your trip. What route will you take? Do you need to stop along the way to rest? Are you giving yourself plenty of time to get there even if you’re held up by a minor issue like traffic or an extra rest stop visit? Taking the time to plan things out can make everything more peaceful as you go.

Set Your Expectations

When you arrive on campus you’ll likely be exhausted and overwhelmed. That’s why it’s important to set your expectations ahead of time. Try to time your arrival so that you have enough time to unpack and then crash and get some rest. In addition, take time before you arrive on campus to associate yourself with several of the classic college concerns of any student, such as choosing classes, looking for extracurricular activities, nailing down financial aid, and understanding where all of the on-campus sports and exercise equipment is.

In addition, if you’re living in a dorm, associate yourself with some of the wiser considerations when it comes to moving in with a roommate. For instance, make sure to create a roommate agreement, discuss appropriate decor, and define boundaries. Before you do any of that, though, remember to be patient and strive to create a good relationship at your initial meeting.

Making It a Smooth Move

If you take the time to foster your health, inform yourself, recruit help, and plan ahead you’ll be able to make a cross-country college move much easier on your mind, body, and soul. When the big day comes, instead of feeling overwhelmed and scrambling, you’ll feel empowered and ready to embrace the adventure that lies ahead.

Remember that renters insurance and tuition insurance are musts when going away to college! GradGuard offers both so you can have even more peace of mind when going through this transitional time.

BIO: Dan Matthews is a writer with a degree in English from Boise State University. He has extensive experience writing online at the intersection of business, finance, marketing, and culture.

Other Student Life

Are You a College Student? It’s Time to Control Your Finances

April 2, 2020

Getting an education is one of the best things you can do for your financial future. However, it’s just part of the success equation and it’s easy to make financial decisions that complicate things. It’s best to take control of your finances as early as possible and it’s never too early. The tips below can help any college student take charge of their finances.

Establish a Savings Account

Saving money is something that some college students don’t think about because there’s usually a limited amount of money available. Even if that’s the case, it’s best to set aside a small amount of mo n ey to serve as an emergency fund. Things happen and you don’t want to end up in a financial bind without a solution.

Avoid Debt When Possible

The biggest debt that most college students incur is student loans. That’s because college is expensive and sometimes it’s hard to pay for tuition and the cost of living without a loan. If there is ever a way to avoid getting a student loan or any other debt, you should definitely steer clear. Some people struggle for a lifetime to pay off student loan debt. If you decide to get a loan, make sure you do so wisely by consulting with a financial aid advisor.

Monitor Your Spending

A simple financial rule that should always be followed is to spend less money than you make. It’s easier to spend more money than you actually earn by using credit cards. This is rarely a good idea and it’s usually something that people end up regretting for many years.

Limit Credit Card Use

Credit cards are surprisingly easy to get when you’re a college student, which can be unfortunate because you’re still learning about finances. Sometimes what happens is the credit cards are maxed out and not paid on time. As a result, a good number of college students end up having to repair their credit later. If you end up getting a credit card, make sure you get one with a low interest rate and pay off the balance monthly.

Stick with a Budget

Having a budget is far more important than you may realize. That’s because knowing how much money you have to spend and sticking with your commitment not to exceed your budget can help you achieve your financial goals. If you need to earn more money, consider a side gig like Uber if you have a vehicle. You’ll be considered a contractor and you can work whenever you want. Instead of receiving Form W2, Uber will use a 1099 generator and send you the information by email or regular mail.

Start Investing

If you’re working a full-time job and they provide a retirement account, make sure you take full advantage of that benefit. It’s easy to think you have plenty of time to invest in a retirement account, but that time will go by quickly. By starting at a young age, you’re more likely to achieve your retirement goals.

Maintain Insurance

Health and disability insurance are two types of insurance that most people should have. If you don’t know whether or not you have these insurance plans, check with your employer. If you don’t have them, it’s time to get them. Not having insurance is something that can have devastating consequences when it comes to your finances.

Being a college student doesn’t mean you don’t have to be diligent about your finances and the financial decisions you make now will impact your future. Since you will probably have a learning curve like most people, it’s best to read as much as possible about personal finances. You’ll be glad you did.

BIO:Brett Clawson has a degree in Business Management and has started a couple of small businesses. When he’s not focusing his time on those, he spends time with his wife and two sons. His oldest son has entered the wonderful realm of college, and he now enjoys sharing tips that he and his son have found essential for college life.

Other Transition

5 Budget Tips for Decorating Your First Home or Apartment

November 21, 2019

Whether you’re moving into off-campus housing during college or settling into a new place post-graduation, the independence of living in your own space is exciting! Turning a new house or apartment into a home is one of the many tasks to complete once you move in. However, decorating can be costly, especially if you’re strapped for cash. Here are some decorating tips that are not only budget-friendly but will enhance your new home.

Dual-Storage

Directly following your move, finding the time to unpack can be difficult. Figuring out where everything should go is often challenging, and you need time to rearrange furniture and items to find their ideal place. Utilizing household storage containers that are also dual-purpose furniture will go a long way in consolidating and decorating at the same time. With the functionality of keeping things orderly and put away, you can also use something like this for a side table, stacked shelf, or even a seat when sitting room is tight.

Thrifting

Thrifting for clothes is fun and cost-effective, but have you ever looked at the furniture section of your local thrift store? You’d be surprised at the amount of couches, armchairs, and coffee tables that are available for a fraction of the price as opposed to a regular furniture shop. Most thrift stores will check to ensure that items are in good condition to sell, but you’ll be able to test it for yourself when you’re there.

Inexpensive Accessories

There are lots of accents that are economical that will enhance your home. Colorful pillows will stand out against a couch, or a soft throw blanket draped over the back of an armchair will provide texture in the room. Pieces with different materials such as these will give visual depth, and will also add to the space instead of making it feel flat. Color coordinating your accents will make your area feel complete, drawing the eye around the room!

DIY/Repurpose

DIY is a popular trend- as it should be! Finding new ways to reuse items can save money and expand your creativity. Look through every room and see where you can find inspiration to repurpose items. One cool project is making potted plants in tea tin containers that have magnets to be able to hang on your fridge, or glass jars that can double as makeup brush holders. For wooden furniture items, refurbishing them with peel-and-stick wallpaper can be a mess-free way to add a patterned design without having to paint!

Moving into your new home is fun, but having to worry about pricey decor items isn’t. With these tips, your space can be upgraded easily and effectively. Let us know some other budget decoration ideas you’ve used in your own place!

Other Transition

Recent Grads’ Guide to Homeownership

November 6, 2019

Upon graduating from college, there are so many things to look forward to, like new careers, new cities, new friends, and much more! Life after college looks different for everyone, but for some, the first big step might be a transition from dorm-dweller to homeowner. In which case, we’re here to help you plan your next move (literally).

Decide Where to House Hunt

Determining the type of house you want to buy and its location can be almost as challenging as it was choosing your major in college. Start by researching important aspects like safety ratings and median home values. Then, narrow down choices based on other criteria important to you. Is the commute distance to your first post-grad job reasonable? Is there enough nightlife to help you make new friends after college?

Think Long-Term

Don’t feel the pressure that your first home needs to be your dream or forever home. Instead, a starter home is a perfect option for first-time buyers—especially someone fresh out of college—as they are generally smaller in size and more budget-friendly. Ideally, you should live in a starter home for at least five years and plan to complete a few home improvement projects along the way.

Even if it’s not on your radar at the moment, home remodeling updates can help you get the most resale value for your home once you outgrow it. In general, kitchen updates are one of the most value-adding renovations—and are doable even with a low-income entry-level job. To help you budget accordingly, take a look at the average project costs for minor kitchen remodels. Remember, you should only spend 5–15% of your property’s total value if you plan on selling in the near future.

Consider Financial Factors

With all of life’s transitions after college and the excitement of potentially owning a home, it’s not uncommon to overlook various expenses. Therefore it’s vital to plan early and thoroughly. Be sure to research the additional costs of purchasing a home, which may include:

Down payments
Property taxes
Homeowners’ insurance

More importantly, consider how your personal finances will change after college and what you need to account for in your budget. Examples include:

Student loan repayments
- Is your six-month grace period for your federal student loans coming to an end?
- Are you on an income-based repayment (IBR) plan? If so, it might be more challenging to get approval for a mortgage.

Health insurance
- Is your student health plan ending?
- Are you in the middle of a health coverage gap until your post-grad job benefits kick in?

Assess Your Credit

Once you establish your budget, it’s time to begin the mortgage process. When you apply for a mortgage loan, most lenders start by looking at your FICO scores—a summary of your credit report. The type of loan you qualify for will depend on your credit score, but the higher your credit score, the higher your chances are of getting approved. Most grads don’t build a credit history until after college; But to remain in good standing, below are tips to improve your credit before applying for a mortgage:

Pay off any existing credit card balances
Avoid making purchases with credit cards (i.e., using available credit)
Don’t apply for credit elsewhere that will generate a hard inquiry (ex: credit cards, car loans)
Consistently make all payments on time, especially student loans

Buying a home is an exciting and expensive investment that will undoubtedly impact your future, so consider these considerations when searching for your first home, and don’t rush the process.

Other Transition

The 4 Most Make-or-Break-It Factors When Choosing a College

November 4, 2019

There’s a lot to consider when choosing your future alma mater. Is attending a big, football-happy university a priority for you? What about a smaller, more private liberal arts school? Do you prefer a college town over a big city? There are dozens of factors to think about when shopping around for colleges. Here are five things to consider when choosing where you want to get your degree:

#1. School Size

When contemplating a small, medium, or large-sized college or university, consider how your future college’s size will affect your ability to meet people. Does it have fraternities and sororities or another way of meeting people? Does it offer any clubs and team sports that interest you?

School size also affects the class size, and class size affects how well you learn. If you do well in smaller-sized classes, look at colleges with a smaller professor-to-student ratio. Consider a larger school if you’d prefer to try your hand in big-hall lecture-style courses.

#2. Campus

Is your heart set on a beach campus, or do you want to attend class in the middle of the city? Some future college students couldn’t care less about where they spend their all-nighters. Others are set on studying at the most buzz-worthy campuses. But consider things beyond city size. What’s your preferred type of weather? If you grew up in Arizona and hate the cold, you probably won’t love Vermont and Alaska’s winter. If you’re looking to ski in-between classes, we don’t recommend going to Hawaii. Choose a school with a location where you can see yourself living comfortably.

#3. Major

Does your dream school have a good program for your major? Does it even offer it? It’s easy to get wrapped up in a school’s social scene and instagramability, but don’t forget to look at its programs. For example, if you’re set on becoming a doctor, make sure your school offers a pathway to medical school. If a school doesn’t offer your desired major, see if there’s an alternative way of reaching your end goal.

Keep in mind 80% of college students change their major at least once, so don’t limit your college choice based on your future degree—especially if you think you might pivot your studies at some point.

#4. Cost

College debt: two words that strike fear into every ramen-eating, penny-pinching college student. If a college’s tuition cost is well beyond what you can handle, don’t go into debt chasing a fun college experience.

Here are three ways to cut down on tuition costs:

Look into scholarships.

Every school offers scholarships—and they’re not all athletic or academic-based. Ask schools about the scholarships they offer, and look into state and federal scholarships and awards.

Apply for FAFSA (free application for federal student aid).

If you’re a US citizen with a valid social security number, you can apply for a federal loan. FAFSA also includes grants and work-study programs.

Save money.

Put money into a savings account while in high school and save money where you can while you’re in college. The faster you pay off your student loans, the less time it has to appreciate. Remember: debt is frustrating no matter what stage of life you’re in, but luckily there are ways to manage your student debt.

In addition to worrying about pesky student debt, you also need to think about how you’ll get by as a student. Is rent pricey or feasible in your college town? What about the fuel costs?

Consider the Big Picture

Beyond cost, school size, campus, and academics, remember that there’s a slew of even more things to consider when choosing the right school. A college’s greek life, class count, and campus are significant factors to consider when you’re shopping around for colleges—but don’t let it be the only factors you consider. Remember to find the fit that is right for you; these are the best 4 years of your life, so make the most of it with a place you really enjoy being at.

BIO: Bailey Caldwell is a freelance journalist whose work focuses on tech, cybersecurity, and the internet. She enjoys researching and learning about new resources and technologies.

Career Other

Knowing How to Finance Big Purchases

October 4, 2019

Grand vacations, weddings, and house purchases are all financial commitments that you might consider in a single lifetime. They’re exciting milestones, but they can be incredibly expensive. Spreading out the purchaser’s cost with financing is the easiest pathway to take. Learn how to finance big purchases with a few tips from the professionals. Those lofty dreams are achievable with smart spending.

1. Know Your Budget

You are the only person who knows your budget. Calculating your monthly expenses, such as rent and utilities, is unique to every individual. Take a look at any leftover funds at the end of your billing cycles. These are the funds that are available to pay for your big purchase.

Figure out this amount well before heading to any store. It’s tempting to walk into a shop, listen to the sales pitch and end up with a larger purchase than you intended.

2. Consider a Large Down Payment

The best way to finance a big purchase is by putting down a large amount on the item before financing the rest of its cost, reports Discover. The down payment can be in any amount, which reduces your monthly cost and interest-rate charges.

For example, you know how much to spend on an engagement ring before you select the jewelry. Pay for 20 or 30 percent of the ring’s price right now, and finance the rest over a few months or years.

3. Use the Credit-Card Trick

Financing a large purchase on a credit card isn’t always the best idea. The interest charges across a year or longer will be staggering. As an alternative, look for cards that have an introductory period of around 18 months, encourages Equifax. Use these 18 months, which are free of interest, to pay off the debt. You end up financing the item without taking out a loan.

4. Think About Personal Loans

Almost all lenders offer some type of personal loan. You can always use this financial tool when you know that a monthly payment over a long period of time is possible. Use loans for those purchases that might be tens of thousands of dollars. You’ll secure a reasonable interest rate for a fixed period. Credit scores might dip as you apply and secure the loan, however, but they will improve with on-time payments.

5. Shop Around

You aren’t limited to your local shops for certain purchases. The Internet gives you a glimpse at the unprecedented competition. When sellers must compete, you save money.

Comparison shop online and in your town, suggests Quicken Loans. You might find the same ring or other items for hundreds of dollars less than you thought before. Open up your mind to jewelry sold from an artist or small business. There are more outlets for big purchases today than ever before.

Everyone falls into financial struggles at some point in life. Continue to assess your budget and save whenever possible. Major purchases are part of a unique life that you can be proud of as success follows your every move.

BIO:Brett has a degree in Business Management and has started a couple of small businesses. When he’s not focusing his time on those, he spends time with his wife and two sons. His oldest son has entered the wonderful realm of college, and he now enjoys sharing tips that he and his son have found essential for college life.

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