Two people track and analyze spend using a graph
14 January 2022

Big expenses take a special level of planning and an appropriate amount of time to save money for it. Do you need help budgeting for a major expense? It’s no secret that everyone faces undue financial stress when big-ticket items come due. Oftentimes, large expenses can lead a family member to take on a second job just to relieve some of the financial stress. However, precise budgeting can help alleviate a lot of unnecessary pressure when saving for these major expenses.


Devise a Plan


Begin planning by determining exactly how much money you need to save to afford the expense. Consider using an equation that looks at the period between now and your big purchase. Calculate by dividing the total cost by the number of months you have until the payment is due. The number you end up with will show you how much money you need to set aside each month to meet your goal and will provide you with a realistic starting point. To prevent surprise charges, be sure to include any miscellaneous costs related to the expense.


Examine Your Spending Habits


The next step is to take account of your monthly spending habits. Pinpoint the specific places and items you routinely spend money on. Then ask yourself, "Is this a necessity or a want?" This questioning can help you quickly identify wasteful spending and reveal areas where you can cut costs and begin saving.


Find Ways to Reduce Expenses and Reallocate Funds 


After you’ve identified excessive and potentially wasteful spending in your monthly budget, you’ll need to strategize how to reduce or eliminate these costs during the months leading up to your big expense. Paying for significant events like a wedding or a vacation can require sacrifice. This means that you may need to refrain from eating out or reduce the amount you spend on nonessential goods and services. For example, if you buy coffee from a coffee shop every morning, consider making it yourself at home. Simple changes like this may have more impact on your wallet than you realize.


Use a Savings Account


Once you have calculated the exact cost of your expenses, you will need a place to save up for it. If you've had trouble with budgeting and saving in the past, stashing your funds in a savings account will allow you to collect money for your goal and minimize the temptation to spend it.

If you do not currently have a savings account, consider visiting your local credit union to open one. Did you know you only need $1 to open a savings account with Teachers? By adopting this regimen and allocating money into this new savings account every pay period, you can get into the habit of reducing your spending and increasing your savings. 


Refrain from Using Credit Cards


The desire to use a credit card for major expenses can be tempting, especially if you want to earn rewards points or cashback. Consider how the large balance will impact your monthly interest. If the balance is not paid immediately, the interest will continue to accrue, making the expense more costly in the long run. The accrued interest can become a hurdle that can make it even more challenging to save and may keep you from reaching your financial objective.


Take Out a Personal Loan


Despite following all the proper steps to save for your major expense, there may be times where your budgeting efforts are not sufficient. In these instances, consider seeking a personal loan to help ease your stress and bring you closer to achieving your savings goal. Credit unions are an excellent place to start, as they often provide low-interest personal loans. For example, we offer a personal loan of up to $35,000 with the added benefit of low monthly payments.

It is understandable if you cannot save the amount you need without financial support from an external source. Luckily, affordable loan programs can help bridge that gap between what you can save from budgeting and your end goal. 


Chart Your Goals and Progress


While you continue on the journey of saving for your big expense, you may find it useful to illustrate your progress. Track your progress using a spreadsheet that you can update each time you make a deposit to your savings account. You can even use the spreadsheet to generate a graph; the visual of seeing the bar grow closer to your desired total will give you gratification and motivation to keep going!




Proper planning and execution are the building blocks to preparing for big expenses. The process begins by assessing your situation and devising a course of action that will allow you to strategically budget for your major expense—without the added stress that comes along with it.