How To Afford Anything You Want

A few days ago, a friend of mine texted me to tell me that the NFL released their schedule for the upcoming season, and as luck would have it, our hometown team, the Washington Redskins, would be in Minnesota to play the Vikings. We’ve always tried our best to attend games when DC teams come to Minnesota, so with the schedule now released, we started hatching our plan to attend this game.

It’s a simple enough process. Since we know when the game will be and can make an educated guess about how much tickets will cost, we already have the two most important pieces of information we need to be able to afford tickets for this game.

From there, my friend and I simply went to the respective savings apps we use and set up an automated savings goal of $1 per day. The game is in October, so by the time we’re ready to buy tickets, we’ll have the money we need saved away. And at just $1 per day, we won’t even notice that we’ve been saving money for the past six months.

Of course, spending $100 to $200 on football tickets isn’t really all that big a deal – it’s not going to make or break us financially – but this story is something that can be translated to pretty much anything you ever need or want to buy.

The basic principle is this: Plan things out in advance, save for it over a period of time, and you can afford just about anything you want.

How To Afford Anything You Want 

For years, I’ve been doing this exact strategy – saving small amounts over relatively long periods of time so that I can then buy the things I want without any guilt or worry. For example, over the past few years, I’ve done the following:

• Back in 2015, I bought a new laptop after my old laptop from law school finally started showing its age. This new purchase set me back about $1,000. I estimated that based on my historical computer trends, I’d probably need a new laptop in another 5 years and I’d probably need about $1,000-$1,200 to buy a new one. So, on the same day I bought my new laptop, I set up a savings goal and started saving $4.62 per week – a barely noticeable sum on a week-by-week basis, but over five years, it adds up to the $1,200 or so I’d need to buy a new laptop.
• I just upgraded my iPhone 7 to the iPhone XR. Like many people, I tend to buy a new phone every 2 years or so (I bought my last phone back at the beginning of 2017). These days, most people just finance their phones and pay $30 to $50 per month to their phone company. Since 2016, I’ve been saving $41 per month or a little over $1 per day to my own dedicated iPhone fund. Every two years, I end up having between $900 to $1,000 to buy myself a new phone – no pain and no guilt.
• A few years back, our very old dryer reached its last legs and we had to dish out $600 to buy a new one. I did a little research and found out that a dryer has an average lifespan of 8 to 12 years. So, the day I bought that new dryer, I went and set up a savings goal of $5 per month to purchase my next dryer in a decade. Now that I think about it, I should probably just invest this money in a no minimum index fund or a free robo-advisor, since my timespan on this one is so long. 
• A year ago, I saw a Banana Republic suit that I wanted to buy when the store was having its annual 50% off sale. I started saving for it last year, then when this holiday season rolled around, I had the money ready to roll. However, after a year of saving, I decided I actually didn’t want that suit. Another advantage of saving for things – by actually saving to buy stuff, I ended up saving money by giving myself a cooling off period before making my purchase.

The point of this is that there are a lot of things we either know we’ll have to buy in a few years or that we just want to buy in the near future. Computers and phones are two staple items that I think most of us tend to buy on a pretty regular schedule. And yet, very few of us actually plan for these things in advance. Instead, we wait until our stuff is old or broken, then we act surprised when we have to buy a new one.

But this doesn’t have to happen. With technology the way it is today, all of us can afford pretty much anything we want. You just need to follow a few steps, which I’ve laid out below:

Step 1: Figure Out How Much You Need To Save

Obviously, to save for anything, you need to first know how much it’ll cost. This can be easier said than done – the price of some stuff will fluctuate, and of course, the farther in time it’ll be until you buy something, the harder it will be to predict the price of that thing.

Still, certain things that we all buy pretty regularly won’t change very much in price, and in some cases, will actually go down in price over time. When I bought my current laptop back in 2015, it cost about $1,000. Today, a comparable laptop will likely cost about the same.

Figure out how much the thing you want to buy costs – then put money aside to make that purchase. At best, you’ll have exactly what you need when the time comes. At worst, you’ll come up a little bit short, which still makes your purchase just a bit easier.

Step 2: Figure Out How Long You Have To Save 

After you’ve figured out what you need to save, the next step is to figure out how much time you have to save for your purchase. Naturally, the more time you have to save, the easier the whole saving process will be.

The best way to think about this step is to figure out when you’ll need to make your purchase, then divide that time period into months or weeks. In general, I prefer saving in monthly periods, but I often save in weekly periods as well when I want to make it feel like an even smaller amount.

For example, a new phone is an easy thing to do a savings break down on. If you tend to spend $1,000 on a new phone every 2 years, then you just need to divide that amount into 24 months, then save $41 every month. If you want to make the savings amount seem even smaller, you can divide that 2 year period into 104 weeks, which means you’ll need to save $9.61 per week. That’s a small enough weekly sum that most of us won’t even feel it.

Step 3: Automate Your Savings

With those first two steps out of the way (knowing how much you need to save and how much time you have to save for it), the next step – and perhaps the most important step – is to automate your savings. Automating your savings is extremely important because once you set up your savings goals, chances are, you won’t even notice the money getting pulled from your checking account on a weekly or monthly basis. You just need to do the hard part of setting up that automated savings.

To do this, you’ll want to use an app or a bank that allows you to create a sub-savings account or some sort of short-term savings goal. Once you have that, you’ll then automate a weekly or monthly transfer into that account or goal. For example, I typically use Qapital to automate the short-term goals that I think about when I’m out and about (these football tickets I want, for example). This app has always worked out for me because I can quickly set up a savings goal on my phone, then automate a monthly or weekly transfer with a few taps.

*NOTE* Unfortunately, Qapital changed to a monthly subscription model to use their app, but they grandfathered current users into a free plan. As a result, I still use their app for short-term savings, but I can’t recommend new people use this app since I don’t believe you should have to pay to save your own money. I’m still trying to figure out a good alternative to Qapital and I have a few that I’ve been testing out that I’ll let folks know about once I’m sure they work well.

My friend who is going to the football game with me set up his savings goal using Simple Bank’s goal-based savings feature. He automated a daily $1 transfer to his savings goal on his phone while we were talking about it. I actually use Simple Bank as my primary checking account, but I haven’t used the goals based savings feature all that much. He says it works well.

There are many other banks and apps you can use also. Ally Bank is another bank that makes it easy to set up sub-savings accounts – and honestly, Ally might be the best bank in the world, in my opinion.

The important thing is to use something that lets you automate your savings very quickly and easily. You need it to be quick and easy because it needs to be something you can do in the spur of the moment, not necessarily when you remember to do it later in the day.

Step 4: Buy Whatever You Want

Once you’ve done the above three steps, eventually the day will come when you can buy the thing you want, completely guilt-free! Congrats!

There’s another added advantage to doing this strategy of saving for things over a decent period of time. Sometimes, you’ll find that with the passage of time, the thing you thought you wanted so badly isn’t something you care about very much. I’ve had multiple times where this has happened, which means I have what essentially feels like a windfall saved away. That’s money I can invest or use for other purposes.

Putting This Into Action 

So that’s the four steps you need to follow. To recap, you can afford anything you want if you do the following: 

1. Figure out how much you need to save.
2. Figure out how long you have to save.
3. Automate your savings.
4. Buy whatever you want, knowing that you can afford it.

Saving money to buy the stuff you want isn’t a radical idea by any means. We already do this when it comes to things like retirement savings, saving little by little so that we can have the money when the time comes. In a way, insurance acts sort of the same way, where we pay a monthly or yearly amount to cover larger expenses that we can’t afford all at once.

Honestly, it’s so simple that it might even feel silly to write this type of post. But despite being so simple, I’ve found that very few people actually do this. Instead, they always act surprised when it comes time to buy a new phone or a new computer or whatever else it is that they knew they had to buy at some point.

And whenever I tell people to just save for the things they know they’ll buy, little by little, over a longer period of time, they always remark at how that makes so much sense. 

Over the past few years, I’ve bought computers, phones, Christmas presents, clothes, tickets, and all sorts of other stuff (including paying for stupid mistakes). Most of the time, I don’t even blink an eye – not because I’m loaded, but because I’ve always planned for the stuff I want to buy.

Having to spend money all at once can be painful. But paying myself, little by little -week by week or month by month – helps to ease that pain.