Every new year brings lots of changes and new expenses that can impact your budget. Many of them are surprises, but chances are you already know what a few of them will be. Instead of waiting until later in the year to save for them, or throw them on a credit card, plan ahead to make sure your big expenses don’t throw your finances out of whack.
Think About It
Although some big-ticket items, such as car repairs, are unexpected — which is why it is important to build an emergency fund — there are others you can predict:
- Friends and family: Will anyone close to you be getting married, having children, or reaching big milestones that you want to celebrate? If so, will these events require travel, and will you be asked to play a bigger role, such as hosting a shower or taking part in a wedding?
- Your own life: Will you be tying the knot, adding to your family, taking a much-needed vacation, or attending a class reunion? Do you have any big purchases planned, such as buying a new car or putting down money for a new home?
- Your children: Will your child be a senior in high school or heading off to college? Or will your adult son or daughter be tapping you for financial support or returning to the nest?
Start Estimating
Once you have an idea of your future events and purchases, start thinking about the price tags.
- Make a list. Write down every big expense and estimate the costs for completing each. If you are unsure of the costs, start pricing things out by researching online.
- Figure out your timeline. Estimate when you will be paying for the event, and determine how many weeks you have to save.
- Start saving. Do the math to decide how much you need to set aside each week to reach your goal.
Make Savings Happen
If you start saving at the beginning of the year, you can avoid charging big purchases on a credit card at the last minute, and paying more in the long run. But finding money to save each week may be difficult.
Try making some of these adjustments in your life to help you jumpstart your savings, but also, be realistic. If you do not think you will be able to save enough for the purchase, don’t make it. Or, find ways to make it cheaper. Because, who wants to start a new year knowing they will be taking on more debt?