How to deal with big expenses coming up

Let´s say you want to buy a new car or you have a big expense coming up.

How do we define big? Well, I would argue that if the expense is higher than 5 times what you have left in your bank account at the end of a regular month, then that is quite a big expense.

How do you approach that from a financial point of view in the optimal way?

Quite easy actually: think about when you would like (or you will need) to spend the money and set up a special saving plan for it. 

For example, if I am planning to buy a new car around 10000 Euro in 6 months from now, I should save 1667 Euro a month to have the full budget covered. You take the budget you have in mind and divide it by the number of months until you intend to spend that money. 

This will also provide a kind of reality check for you - can set aside such an amount of money? Do I need to postpone the purchase? Or maybe lower the budget?

Once you find the balance, I would set an automatic transfer from your normal account to your saving account - if you can add a time limit (e.g. the transfer will end in September 2022) and write in the comment on what you are going to spend the money. In this way, when you categorize the expenses (back to an earlier post), everything will be logged properly!