Like many others in their 20’s (and even 30’s), I’m feeling the pressures of adulthood – college is over, a career has been obtained, and it’s time to be a real-life grown-up! Friends are getting married, buying houses, and starting families. As excited as I am to join this elusive club of workaholics and soccer moms, it’s hard to not be at least a little intimidated by all of the dollar signs associated with some of those things. However, for the first time in my life, I don’t feel like these things are so far out of reach. With a little planning, larger purchases are most definitely attainable, and with a new car and a house on my horizon, I’ll spend the next year proving just that! So where do I even start?
Set a goal, make a timeline. Thousands of dollars won’t magically appear in your account overnight (and if they do, please share your secret with us!). Saving up will take some time. Some good questions to ask yourself would be how much money you’ll need for a down payment (or for the total purchase, if paying in full is feasible for you), and how much money you can afford to set aside while still maintaining your normal monthly savings. The last thing you would want to do is spend all of your money on a large purchase, only to have an emergency pop up shortly after. Be sure to stash some cash as a financial cushion. The amount of money you’re able to put aside towards your goal amount will help you decide on your timeline. Slow and steady always wins the race – don’t let a long timeline deter you! While larger purchases might require goals that will take longer to reach, you’ll be better off in the long run if you save slowly according to what your budget allows.
What can I afford without feeling strapped for cash? Head on over to your account at BudgetSimple and take a peek at your unallocated funds! Do you have enough left over every month to make a monthly payment without feeling like you have to sacrifice your groceries or social life? Or maybe that’s just fine by you. Make sure you have your priorities straight and your necessities taken care of first before you take on an additional monthly payment for a car or mortgage.
Save, save, save! One of the best ways to do this is to have money taken directly out of your paycheck and deposited into a separate savings account. After all, it’s awfully hard to spend money that you don’t have just sitting in your checking account – out of sight, out of mind! You can also save in smaller ways, as well… skipping your morning stop at Starbucks, packing your lunch instead of dining out, renting a movie instead of a night out at the theater. Every little bit makes a difference, so add these bonus bucks to your savings pile.
You’ve put together your plan, now stick to it! It can be tempting to borrow from your funds or skip out on small contributions, but remember your end goal, and keep working towards it. You’ll get there faster than you think!
If you’re in the market for a new car or house, don’t forget to consider these often-forgotten facts:
- Cars need maintenance! The oil needs to be changed every 3,000 miles (give or take), tires need to be replaced, and it needs to be inspected yearly. Be sure to add these factors into your budget! *Helpful tip: For things that aren’t purchased monthly, estimate your total cost for the year and divide that number by 12. Setting aside a small fraction of the cost every month is a lot more manageable than one lump sum.
- Don’t forget about fuel! A brand new car would be useless if you don’t have the money to gas it up. Consider smaller, more fuel-efficient vehicles to get the most bang for your buck, especially if you’re logging miles on a daily basis.
- Car insurance is required by law, and will constitute another monthly payment on top of what you’re already paying for your car. Be sure to shop around and compare rates, and ask about any special offers or promotions companies may offer for safe drivers with a clean track record.
- Life happens! What happens when there’s a leak in your roof or your basement floods? Can you afford to fix any repairs that pop up unexpectedly?
- Property taxes will need to be paid in addition to your mortgage, and the rates for these can change depending on where you’re purchasing a house. Take this into consideration when exploring different neighborhood options.
Happy spending!
