How To Plan For Big Purchases Without Derailing Your Budget

With life’s unexpected events, an attractive marketing campaign, or a slight oversight in your personal financial health, it can be easy to let your money slip away— especially if it’s not properly monitored. According to NerdWallet, 83% of Americans overspend, and 84% of those who have a budget put in place exceed it.

To combat these spending habits and prepare for unforeseen bills, Her Agenda spoke with several financial experts to get insight into how to best prepare for larger purchases, even if you have one of the tightest budgets.  

One-off larger expenses can sometimes be hard to avoid, and in some cases, may even be inevitable. If you have an unexpected medical expense or an urgent home repair, you don’t want to be stuck with a large bill and no money resources to pay for it. 

Paul Gabrail, founder and host of YouTube channel and podcast, Everything Money, suggests pre-empting large purchases by actively adding them to your budget beforehand.

“The best way to do this is to figure out what you tend to spend every few years on big purchases and divide that over the number of months,” he said. “For example, if you spend $25,000 every five years on something big, that averages out to $5,000 per year or $416 per month. Put $416 as your monthly line item for big expenses. Using historical data or information on your spending habits helps you to be realistic.”

Automatic transfers remove emotion from the equation by moving money to savings before you can spend it, creating a hands-off system for building wealth over time.

“Treat these savings like a bill, which means you don’t skip it,” said Prisca Benson, money coach and founder of Our Green Life. “You might also benefit from setting up automatic transfers from your checking account to that separate account you opened.”

“Use price tracking tools and coupon plugins to help you score the lowest price,” said Andrea Woroch, consumer finance and budgeting expert.  

Modern shopping technology can give consumers powerful tools for saving money effortlessly. Browser extensions and price tracking services work behind the scenes to find coupon codes, monitor prices, and alert you to deals on wishlist items. Combined with cashback services, this approach ensures you’re getting the best value on planned purchases without constant effort.

“To tame that unnecessary spending, learn how to iIdentify and eliminate spending triggers,” Woroch said. “The money saved on those unnecessary purchases could help you save up for the items you need or really want.”

Impulse spending often stems from emotional triggers and external influences, per the National Institutes of Health. Whether it’s stress shopping, social media advertising, peer pressure, or shopping while tired or hungry, recognizing these triggers is crucial. Understanding your spending psychology lets you develop targeted strategies to avoid unnecessary purchases, like unsubscribing from promotional emails or finding non-shopping ways to manage emotions.

The 50/30/20 rule structures your after-tax income with a practical balance.

“Using your after-tax income, allocate 50% to needs (like rent, utilities, and groceries), 30% to wants (like dining out or entertainment), and 20% to savings,” said Mary Hines Droesch, head of product for consumer, business, and wealth management banking and lending at Bank of America. “With large purchases taking priority, adjust the savings percentage to allocate funds for them so you’re prepared in advance and can avoid any surprises,”

While these percentages provide a solid starting point, they can also be adjusted based on your goals. When saving for major purchases like a house, you might reduce discretionary spending to increase savings. This flexibility makes the rule adaptable while maintaining smart money management principles.