It’s the beginning of the year, so you may not be thinking about what’s on the horizon financially for the rest of the year. You should be. Almost anything you do has some kind of cost associated with it. And, if you’re like me there’s a lot you want to do. Whether it be vacations, the kids birthdays, a car, a house, a child, a wedding, here are 7 major expenses you need to plan for now.
As a professional or entrepreneur, there are conferences and/or conventions that you may be required to attend and some that you want to attend and feel will be beneficial to you. Then there are the organizational events that you are expected to attend because of your affiliation with said organization, such as a national convention for a sorority. Get prepared now! Will you have to find a plane? What is the cost of the hotel? Will you need to purchase your own food?
December and January seemed like engagement season. I saw countless congratulatory messages and ring posts on my timeline celebrating engagements. After the engagement, it’s time to plan a wedding and with the average wedding in America costing $32,641, according to TheKnot.com, that is one major expense you cannot afford to put off. When thinking about the financial aspect of your wedding, it goes without saying that more guests = more money. So, think about how many people you want to invite, the breadth of the meal and drink selections, the decor, etc. There are ways to cut costs and ways to still have what you want on a budget. So do your research and get to planning.
Perhaps you’re not getting married, but you’ve been invited to a wedding or two or three, you, too have some costs to add up now. Will you have to travel? Do you need specific attire? What amazing gift are you going to get the bride and groom? Your expenses can add up quickly.
The summer will be here before you know it and who doesn’t like to go on vacation? I surely do! Now’s the time to begin thinking about where you may want to go. Research lodging, determine how you will need to get there and figure out what activities you may want to do. Planning ahead of time can cut costs drastically.
Buying a house is not for the faint of heart. It requires you to not only be able to afford the home you purchase, but to be able to show that you are fiscally responsible. That means you have to be organized and have your ducks in a row for the process to go smoothly. Before you even pick out your home, get your financial documents in order, because you’re going to need them. Once you are organized, you need to pull your credit report and make sure there are no errors and if there are you need to dispute them. You may also need time to clear up any negative items on your report. The better your credit score, the cheaper the interest rate you will receive, in most cases. Finally, you need to begin saving for the fees and expenses that occur with a home purchase such as the closing costs, down payments, etc.
Is this the year that you and the hubby plan on trying to conceive? I’m so happy for you! I’ll be happy for your wallet, too if you understand that KIDS ARE NOT CHEAP and that you can need to get your house in order NOW. First, once you conceive, you will have a ton of medical appointments to attend before and after your child’s birth. You need to consult with your insurance carrier to see what your financial obligation will be for these appointments. With the efforts to repeal the Affordable Care Act in the works, who knows what appointments that are currently FREE will turn into an undue expense for you. You also need to plan for clothing and supplies for you and the baby. Hopefully, you will be gifted with everything you could possibly need (it happened for me with my first child), but if you’re not, you need to plan for the expenses you will incur. Be mindful that more than likely, you will need new clothes to adjust to your growing 2+ person body, so go ahead and write those into your budget.
Why wait until the birthday is right around the corner to start budgeting for it? You can set aside a little bit every paycheck starting NOW. Will you be throwing a party for your kids, your spouse, your mom, cousin, friend? You get my drift. Don’t forget the birthday gifts you have to get for your mother-in-law and grandfather. These little annual expenses can wreak havoc on your wallet if you’re not prepared. My husband and I set a limit on how much we spend on birthday gifts and now that we have kidS…plural…we’ll be establishing a limit for their birthday parties, too. (Though, I’m pretty savvy at having a great party on a microbudget….that’s another post for another day.) I highly suggest that you set spending limits, too. We make exceptions for milestones, but other than that, everybody is getting a $XX gift. Get out a pad of paper now and make a list of who you plan to buy gifts for this year, as well as any parties you plan to host and figure out how much you need to save each paycheck to fund these birthdays.
Are you in the market for a new car? If so, start by listing out what you need from the car. With a family of four and a large dog, I need space! What are your needs? Also, make a list of your wants–you know those things that you don’t necessarily need, but would be a great perk if the car has those amenities. Research USED cars from certified dealerships or, at your own risk, sites like Craigslist. Yes, I said used because cars depreciate in value immediately after you take it off the lot. No point in dropping tens of thousands of dollars on a car that will be worth just a few thousand dollars a short while later. Also, be sure to make sure to research the car’s gas usage. Remember, not only will you have to pay to purchase the car, you are going to have to pay to keep the car running. Why buy a car that you’re going to need to fill up every 20 miles? Determine how much you can safely afford to spend on a car payment. That will hands down be your non-negotiable line in the sand. If you can afford to do so, start setting money aside now as a down payment so that you can reduce your monthly loan payment.
Whether you’re paying for private school for your kids or paying tuition for your own education, this is an expense that you should keep as a line item on your budget. Don’t wait until it’s time to make that tuition payment to start putting away money. You can reduce a major hit to your wallet by continuously allocating a small amount from each paycheck towards education. Your wallet and your stress level will thank you.
There may be other major expenses that are on the horizon for you and your family; write them down and start making provision for them today!
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