Being financially prepared for key life events can make all the difference. Here are six of the most important events to budget for starting now.:
Budget for These 6 Life Events
Certain life events are extremely expensive. If you don't prepare for these in advance, you could end up going into debt when that event rolls around. That's why you're much better off when you start budgeting for these events years ahead of time.
Even with financial aid, getting your degree can cost tens of thousands of dollars. Whether you attend college immediately after high school or you go back to school later in life, saving money first can help you minimize student loan debt.
Getting married is one of the happiest moments of your life, but you don't want that happy moment to put you in debt for a decade. You can opt for a smaller, less expensive wedding; just make sure you still save for it.
3. A Home
You'll get a much better deal on a mortgage if you can put at least 20 percent down on a home, which would be $60,000 on a $300,000 home. That's a lot of money, but it's worth it to pay less interest and avoid paying for mortgage insurance.
Once you have kids, there's a whole new set of expenses to deal with, starting with diapers and baby food. Having extra money saved can ensure that a new addition to your family doesn't break your budget.
5. Job Loss
This is one life event you hope to never go through, but you don't want to be caught off-guard if it happens. It usually takes people about three to six months to find a new job, and we recommend you always have at least six months' worth of living expenses saved just in case.
Far too many people put off saving for retirement because it seems so far in the future. With compound interest, you'll have a much larger nest egg if you start saving earlier in life. Pay at least a small amount toward your retirement accounts every month so that you have more than enough when the time comes.
For most people, these are six of the most expensive life events, and saving for them now will pay off in the long term.
Please contact us if you have any questions or would like any advice on financial planning.