Make a big purchase

When it comes to making a big purchase, having a plan can make all the difference.

These steps may help you save more and explore various financing options.

Create a savings plan for your big purchase and commit to the idea of “paying yourself first.”

This means that you deposit a specified amount into savings every time you’re paid, just like you would with any other monthly bill.

So, before you make a large purchase, aim to have 3 to 6 months of expenses set aside for emergencies. This may sound like a large amount, but an emergency fund may help you to weather unexpected bumps in your finances.

It’s okay to start small, just be sure to begin the habit of regular saving. Consider the goal of saving one paycheck’s worth of income and build from there.

Once your emergency savings are in place, you may be ready start saving for your big purchase. One way to make this a habit is by automating it. To get started, visit My Savings Plan^® to set up automatic transfers and track your savings progress.

When it comes to big purchases, some sources should be left in place.

For example, consider using your emergency savings only for unexpected or emergency costs. You don't want to deplete these important funds on purchases that aren’t essential.

Similarly, only use retirement savings as a last resort, as early withdrawals may come with taxes and penalties.

Always consult with a financial advisor or tax professional to fully understand the impacts of removing your money early.

If you’re ready to act on your big purchase, but your savings won’t cover the total cost, you may want to compare your borrowing options.

You might consider looking for credit cards with low introductory interest rates or rewards programs that align with your dream purchase. For example, some cards may offer cash back, travel, or hotel rewards.

If you’re thinking about taking out a personal loan, we make it easier to see a a personalized rate and payment estimate with no impact to your credit score.

Keep in mind that credit cards are usually better for smaller expenses that can be paid off quickly, while personal loans are preferable for larger expenses that will take more time to pay off.