When the mercury plummets and the wind howls across our frozen landscape, summer dreams are born. Dreams of a new RV . or watercraft . or four-wheeler . or .? Well, your dreams are your own - but if they are filled with visions of a new summer toy, the first thing you need is the money to buy it. So, in the interests of getting through a woeful winter and into a summer of scintillating fun, here's how you will be able to afford your new summer toy: It's called saving and here are a few keys to developing a savings strategy that works:
Pay yourself first. Whether you're saving for a summer toy, a vacation, your retirement, or anything else, this is one of the best available saving strategies. Pay yourself first by saving an amount each pay period that you can comfortably afford -- either a fixed-dollar amount or a percentage of your income (3% is an often used guideline). You're unlikely to miss it, and it can allow your nest egg to grow nicely.
Get max growth from your savings. Get your savings out of low-interest bank accounts and into investments that generate higher returns yet are easy to access when you've reached your goal amount. Money Market Mutual Funds can be a good choice - they usually offer competitive returns and can often be redeemed in a few days. Guaranteed Investment Certificates (GICs) or Term Deposits are good, too - but, you lock your money in for a fixed period in exchange for a higher interest rate. Government Savings Bonds are another option - cashable at any time (usually with a small interest penalty) and often available for purchase through an automatic payroll deduction program that can be a great pay-yourself-first strategy.
Look around. By saving before you buy, you can also save on what you buy. You have the time to check out the best prices and times to buy - like at the beginning or end of a season when merchants are clearing stock.
Pay with real money. Don't finance your toy through high-interest credit cards or by 'stealing' money from investments or savings destined to achieve other goals, like a comfortable retirement. Buy what you can afford with cash on hand - that way you'll also eliminate the costs of financing and may be able to negotiate a better 'cash deal' with the merchant.
With some smart savings strategies, you can realize your summer dreams and with the help of a professional advisor, you can realize your lifelong dreams, as well.