How do you leverage your buying power to pay for big-ticket goods or services?

Question  How do you leverage your buying power to pay for big-ticket goods or services?

Answer  Use your PYF Savings account to leverage10 your buying power to pay for big-ticket goods or services, then pay it back.

Complete Answer  Although “leveraging your buying power” may sound like a complicated financial concept, it is really quite simple. An example is a gas station offering a gallon of gas a few cents cheaper if you pay with cash instead of using a credit card.

The term “big-ticket” is normally used to describe expensive purchases. For the purpose of this blog, I will use the term “big-ticket” to describe things that cost $1,000 or more and cannot be paid for from a typical monthly Spending Plan.

Example My car insurance for two cars, a pickup, and a scooter all come due the same month each year. The total bill is more than I can pay for from my Auto Expense account in my Spending Plan. I use money from my PYF Savings account to pay the total bill all at once. By paying the auto insurance bill for one year, I take advantage of available discounts. I then amortize the discounted cost of one year of auto insurance over the next year.

Using rounded numbers as an example: The discounted cost of car insurance is $1,200.00. It is more than I can afford in one month from my Spending Plan for Auto Expense. I borrow the $1,200.00 from my PYF Savings account, then divide the $1,200.00 by 12 months and pay back $100.00 a month. This expense is part of my monthly Auto Expense. Please note; my monthly Auto Expense including the amortized auto insurance of $100.00 does not exceed the total recommended amount, 15%, for Auto Expense.

Financial Literacy Knowledge/Skill

How to use a PYF Savings Account to leverage your buying power to pay for big-ticket goods or services.

Comments or Questions

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Next week’s topic: How do you fund your retirement account?

 

2 thoughts on “How do you leverage your buying power to pay for big-ticket goods or services?”

  1. I know this if off topic but I’m looking into starting my own blog and was wondering what all is needed to get set up?
    I’m assuming having a blog like yours would cost a pretty penny?
    I’m not very internet savvy so I’m not 100% positive.
    Any suggestions or advice would be greatly appreciated.
    Many thanks

    1. Dear geoffreyteeter
      GREAT QUESTION! Do exactly what you are doing right now – ask questions. You should have a clear idea of what you want the blog to accomplish and the amount of resources, time and money, you are willing to commit to the blog. Then you will need a company to host the blog and a program to write the blog content. I use Go Daddy to host my blog and Word Press to write the content. Go Daddy has been very patient and helpful in answering my questions and Word Press provides a variety of templates to write the blog content. Best of luck. Jack

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