After comparing your options and choosing the product, divide the amount you still need to save by the number of months you can wait.

Concept used: opportunity cost

Planning a purchase also involves considering opportunity cost: the benefit of the best alternative you give up when you use your money in a certain way. Spending right away may mean giving up keeping a reserve, earning some return, or using the money for another priority. This does not make the purchase a mistake, but it helps you evaluate the decision more fully.

How do you calculate how much to save each month?

Use this formula:

Amount still needed for the purchase ÷ number of months = monthly amount needed

Example

Imagine you want to buy a $3,600.00 coffee machine and can wait six months:

$3,600.00 ÷ 6 months = $600.00 per month

(The prices used in these examples are illustrative)

In that case, you would need to set aside $600.00 a month to reach the purchase amount by your planned deadline.

If you already have part of the money, subtract that amount before doing the division:

(Product price − amount already saved) ÷ number of months

Where should you keep the money for the purchase?

You can keep the money in a separate account that earns interest and lets you withdraw it when it's time to buy.

Before choosing where to keep it, check:

  • how easy it is to withdraw;
  • how long until the money is available;
  • possible taxes;
  • fees;
  • net returns;
  • any protection or insurance that applies to the financial product.

The returns won't necessarily be high over a short period, but they can add a little something while you get ready for the purchase. The result will depend on the rate offered, taxes and how long each deposit stays invested.

Try negotiating before you pay

Once you have the money you need, check whether the store offers a discount for paying in full upfront. The discount is not guaranteed, but it's worth comparing:

  • the cash price;
  • the installment price;
  • the total amount of the installments;
  • the discount offered;
  • possible card benefits.

If there is no discount, you will still have avoided an impulse purchase and arrived at the moment of purchase with the money you planned for.

Watch out for price changes

The product's price may go up or down while you wait. So keep an eye on it and, if possible, build a small margin into your plan.

Waiting isn't only about saving up money. That time also lets you research reviews, follow promotions and confirm that the product really meets your needs.