Recent talk between friends has raised this question when talking about anything from holidays to a new macbook, and I’m learning many different methods and practices.
Some of my friends simply divide the full amount into savings chunks and will put aside say 10% every month until they can afford something.
Some people split that for a shorter time and bigger chucks.
Some people use credit cards and finance schemes.
Personally I save chunks, use credit/rush cards that are paid off within the month. + =
So thought i’d pose this question here;
Does anyone have any quick wins, lessons learnt or great ideas on how to pay for high-value items?
Is this Monzo market research for buynowpaylater products or just general chitchat, or a bit of both?
I either tell myself I can’t afford it or whack it on a credit card and pay it back when I can. Whether I “can’t afford it” or put it on credit depends on how much I want it and how much pain will be inflicted later by taking out credit.
General chitchat! I realised recently I don’t own many high-value items since buying my mac 4/5 years ago ago! And jobs, responsibilities and lifestyles have changed since then. So more a knowledgeshare on how people do things now
And that credit cards method seems like the most common too.
I put little bits away every now and then. It might be weekly or when I have some leftover money or even when I get paid. I’ll then buy what I want when I have enough.
I’m pretty bad for dumping it on a credit card or a buy now pay later. The PayPal credit 3 months interest free is something I’ve used a few times over the last year
I have a savings account which I put about £100 a month into that I can spend on luxury items as and when I want - I bought a MacBook in January with it and my phone is currently dieing so I’ll need a new one soon.
It works for me because I don’t really buy big luxury stuff, but working on the basis that I’ll need to replace something a year it works for me and means I can buy a better model of whatever it is.
I tend to get a 0% interest credit card over a long period e.g. 18 months, pay for it on that, then pay money onto the card over 18 months. Basically making it an interest free loan.
Worked well when I bought my macbook a few years ago.
Most of my purchases I just buy outright - if I can’t afford it then it probably isn’t a good idea to buy it anyway. I would only consider going into debt if I had no other choice and the purchase was essential (let’s say my work laptop dies).
If the savings won’t cover it (and leave enough left over) then I generally won’t buy it. If I had a 0% credit card then I’d have no provlem with that method other.
Even with the savings approach, I have started some sort of budgetary attempt to try and build them back up to pre-purchase levels.
Each month I put around 60% of the money I want to save into my ISA and then the remaining 40% is split between different “Pots” or other savings products.
I don’t buy high-value items often but when I do then I’ll take it from the account that is for that particular item. For example, yesterday I bought a new MacBook Pro and that came out of the “Tech” savings pot.
For my Apple related purchases, of which there are many (yes I’m a ) I often buy myself Apple Store gift cards over a few months. That way I know I have the money locked up for just that purchase. My family give me them (bought online, otherwise they accidentally give me iTunes credit, which annoyingly is not the same) too so I always have a little balance for whatever comes out next. It’s how I got the HomePod - I wouldn’t have spent that much money on an impulse purchase, but knowing I had money set aside (which would have gone towards next years iPhone) let me treat myself.
For other stuff I’m saving for, a big holiday at the end of the year, I’ve been putting it in a Skipton ISA. It’s only 0.90% interest but that’s fine, it’s not a big enough balance or being held for long enough to be worth putting into an investment account or to open a higher interest current account. The ISA means it earns a little interest and it’s separate from my bank/credit card interest so I won’t be tempted to spend it.
I have a 0% card that I put the following spends on:
Annual Charges (12 month subscription, car insurance, MOT, etc)
Big Purchases - holidays, laptops, etc etc
I then have a spreadsheet where I work out the monthly cost of each item (normally over 12 months instead of the length of the card - stops me from ‘building up’ annual costs).
I then set aside £200 every month to pay it off (however much the monthly cost is, so I pay it back quicker). If the total monthly cost goes over £100/month, I try and ease back. When it goes over £150/month, I really try and stop. If I can’t stop it going over £200, I reshuffle the amount of time to pay back (though that’s last resort and never got to that stage).
Has allowed me to afford to own a car and go on holidays, which I wouldn’t have done if I was just saving (as I would’ve kept eating into it).
) I often buy myself Apple Store gift cards over a few months. That way I know I have the money locked up for just that purchase. My family give me them (bought online, otherwise they accidentally give me iTunes credit, which annoyingly is not the same) too so I always have a little balance for whatever comes out next. It’s how I got the HomePod - I wouldn’t have spent that much money on an impulse purchase, but knowing I had money set aside (which would have gone towards next years iPhone) let me treat myself.