No better thing can be compared to reaching those important major financial goals in life. Some milestones include getting married, buying a home, paying off your student debt; these are milestones you should be proud of when you reach them. The question is how do you reach them?
It takes planning carefully and dedication to reach some of these milestones especially with most people having financial goals. Each goal has different required steps and processes, and each certainly comes with its challenges. So, are there tricks to reach your financial goals? Let’s take a look at some essential tips for budgeting for 4 of life’s biggest milestones.
Buying Your First Home
Saving up to buy your first home is an important goal for millions of Americans. This goal is also one of the most expensive goals. It is very important that you take some steps to best financially prepare you for the big move when you prioritize purchasing your first home.
- Budget: The first thing is to figure out the price of the home you can afford. This includes mortgage, property taxes, and insurance. Doing this will prepare you for your next step.
- Down Payment: This means deciding the amount you need to save to purchase your new home. You can be required to make anywhere from 3-20% down payment on your home and this depends on the type of loan you take. You may qualify for 0% down payments.
- Save: You need to take some time to save towards your home goal. Doing things like paying your future mortgage and paying yourself first can go a long way here. When you pay your future mortgage, you act as if you are already paying on your home loan; You still pay your rent, but you set aside anything additional in savings. Paying yourself first means when you get paid, you set aside a predetermined percentage for savings before you spend the rest on bills and other purchases.
Paying for your wedding
As expensive as weddings can be, the last thing you would want to do is start your marriage in debt because of your wedding. Endeavor to take time to plan and save for your wedding.
- Budget – Decide how much you plan to spend. Consider catering, event space, dress, floral decor, DJing, the cake, etc. Make sure you thrown in your honeymoon costs, as well! Once you have a total, figure out how much you can set aside each month to pay for the wedding and set your date accordingly.
- Ask for Help – Do you have a cousin who DJ’s? What about a friend who takes great pictures? You can save a lot of money by delegating certain tasks to friends or family.
- Off-Season – If you really want to stretch your wedding budget, pick a wedding date outside of early summer or early fall. When your wedding is during off-season, like January, you can save a lot of money and stretch your budget further.
Paying Off Student Loan Debt
It can be overwhelming when it comes to paying off your student loan debt after graduation. It is possible sooner than later when you prioritize paying it off and follow a plan.
- Budget: Creating a budget should be your first step where paying off your debt is prioritized. Figure out how much additional you can pay towards your debt each month. Sacrificing now means you can be out of debt earlier in your career.
- Look for Extra Money: Every little earnings count. Try to sell things you are not using again in the house or try to take a part-time job. When your debt is cleared, you will be glad you took the job.
Saving for Retirement
Saving for retirement for many people seems far out of reach. You can possibly plan to retire early when retirement’s savings are prioritized.
- Plan – Don’t start saving until you know how much you’ll need to support you in retirement. You need to devise a retirement plan, calculated based off of how much you need to cover bills, medical expenses, and anything you plan to do during retirement (traveling?). Once you have your plan, it’s time to set your savings budget.
- Budget – How much money can you put towards retirement savings each month? If possible, try to have money automatically deducted and sent to your savings account by your employer. When you don’t see the money, it’s easier not to spend it. It’s also important to build your budget around your savings plan. Always remember, pay yourself first!
- Save – Save and save early. The sooner you begin to save, the better. Utilize all retirement savings plans you can, such as a 401k from work for opening up your own IRA.