You may not know it, but you’re saving up for something. You have been from the moment you were born. You’ve been trying to save up money to do things that are important or special to you in your life. That can be a family vacation, buying a house, taking time off work after having kids, or just going on a shopping spree.
But how do we go about figuring out what’s worth saving up for and when the right time is? Find the answers to those questions with the help of this article.
Buying a house
Perhaps you’ve been renting an apartment for years and have never owned a house. You’re sick of the hassles that go with renting and decide to save money so you can buy your dream home. To do this, you’ll need to figure out how much money you need and how long it will take you to get there.
First, you’ll need to calculate all of your costs for when you buy a house. It will vary depending on the price range of the house itself. But it usually includes closing fees at both ends, property insurance, and private mortgage insurance if you have less than a 20% down payment. You’d also have to think about property taxes, repairs and redecorating, landscaping, and transport, to name a few.
Luckily, you can get house calculators on websites like Zillow that can help you do this. Once you know how much money you’ll need, make sure that your monthly budget has room for saving this money.
Getting married
It’s a special time to be together with the person you love. But it can also be an expensive time if you don’t save up enough beforehand.
Firstly, there are the costs of getting your marriage license and officiating. It’s typically under $200 per jurisdiction, although some may require more. If you want to have a big ceremony, you’ll need to save up for your attire, flowers, decorations, and catering. The cost will depend on your tastes, but if you stay away from too many frills, it shouldn’t cost more than $5000 or so all in.
Having kids
This is one of the most expensive events that can happen to a family since many people will need to take time off work. That means you’ll have your regular expenses and those specific to raising children — diapers, formula, toys, clothes, and childcare.
In the U.S., these costs can easily add up to more than $15,000 per year, which is why it’s essential to save up. When you go back to work, childcare can cost more than your entire salary per month. If you want to make sure that these costs don’t discourage you from having kids, start saving at least six months before the baby is due.
Sending children to school
From preschool classes to extracurricular activities or boarding school, your options for your child’s education are endless. You must save up for these expenses so that they don’t ruin your family budget.
Your first step is to research different schools, what they offer, and how much it costs. Some may be free, but most require yearly payments, which can be thousands of dollars per year depending on the school. If you want to make sure that your child is prepared for college or has the skills to get into a top school, you can also take some prep courses.
Taking a family vacation
Whether you want to go on an around-the-world trip or pack up and head out of state, you will need money saved up before embarking on your family holiday. You’ll need to do some research and figure out how much and what you can spend, such as accommodation, food, sightseeing tours, and travel costs for the journey.
Also, consider if any of your kids will be entering school soon so that they can transition as smoothly as possible after returning from vacation.
Starting your own business
Owning a business is one of the most rewarding things that you can do. But it’s also among the riskier entrepreneurial pursuits since if your start-up fails, there might be no fallback for you and your family.
This means that starting a small business requires careful planning. You’ll need to do some market analysis and business planning first, and make sure that you have enough money saved up as a safety net before starting it.
Medical emergencies
It can happen to anyone, but what matters is how prepared you are for it. Medical care is expensive today that most people don’t have enough coverage in their health plans to pay for major surgery or hospitalization. That’s why you must save up for it before getting sick becomes an issue.
To avoid financial ruin, save up for a health savings account. It’s a special kind of savings account that gives you tax breaks and provides the funds only when used for medical expenses.
Saving up for these events in your life is the best way that you can avoid financial ruin. Instead, if you plan and meet your financial goals, you can enjoy the different milestones of your life without worrying about money.