All of these huge life changes required smart savings, lots of planning, and also careful spending.
If you know you have a big life change coming up whether it’s a wedding, new job, big move, or new babies, here is how you budget for them.
1. Overestimate the Cost
When you start saving and budgeting for a big life change, you’re going to want to think of the worst case scenario. For example, I knew I’d either have to move to the New York area or Michigan. Obviously, moving to Michigan would have been far cheaper. From my research, I knew that a move to New York would cost several thousand dollars to move in once you calculated the first and last month’s rent and often a broker’s fee and deposit. Based on my research, I built a savings account of $7,000.
As it turned out, we had to move just outside of New York City. We had less than two weeks to do it, and we did not have time to really shop around or do heavy negotiating. When it was all said and done, we mailed a check for $6,500 overnight to our leasing agent, and we got the apartment we wanted.
If I hadn’t saved that money ahead of time, we might not have been able to move to the best area for our family, and we might have gone into debt trying to scrape together enough money for the deposits and fees. Because I overestimated and prepared for a worst case scenario, we did just fine.
2. Put Money Away Automatically
I was able to save large amounts of money for big life changes because I was essentially working two full time jobs towards the end of last year. I had my 9-5 but I also had my online writing business that I worked on every single night when I got home from work. I poured all my extra income into these savings accounts, and most of it went in automatically. Using different programs, I had various amounts of money directly depositing into savings on the first of every month. I’m a big believer in saving at the beginning of every month. If you wait until the end to see what you have left over, you’ll never save enough.
By doing as much reasearch as possible about your big life change, giving yourself enough time to save, and putting money away automatically, you will be well on your way to being as prepared as possible.
Big life changes can be exciting, fun, but also stressful. If you don’t have to worry about money while it’s happening, I promise you will feel much, much better about the transition. Remember, if you need help budgeting, try out Budget Ease. Texting in your expenses is a great way to keep track of your finances!
Do you have a big life change coming up?- Catherine Alford