You’ve committed to getting your personal finances and budget in order this year. You know how much money you need to set aside for recurring expenses such as housing and utilities, but how do you plan for unplanned occasions, such as weddings, vacations and parties?
Here are a few easy ways to start budgeting now for those hard-to-budget-for life events:
Start a list. Grab a calendar and identify which occasions you’ll need to budget for. Birthdays, holidays and weddings are just a few milestones requiring some level of financial commitment. Once you’ve identified the events, determine how much you plan to spend. Gifts, cards, transportation and dining out add up through the year.
Set a budget. Now that you know what your commitments are for the year, take a look at money coming in that isn’t earmarked for necessities, and decide what percentage of that can be budgeted for these life events. Once you determine that dollar amount, set a budget for each occasion and make sure it falls within the amount of money you have set aside for your Big Milestones Budget. Of course, if you’re under budget, pocket that money in an emergency fund. That way, if something unexpected comes up throughout the year, you’ll have some cash stashed away.
Save. Now that you’ve established a budget, it’s time to stick to it. Make sure you’re adhering to the amount you decided to put aside each month and referring frequently to the budget you have allotted for each event before opening up your wallet. Remember, if your financial situation changes throughout the year, your budget for each event needs to be flexible. And don’t be afraid to forgo a few luxuries such as your morning coffee, hair appointment or new clothing in lieu of saving for the year’s big events. Little financial sacrifices in the short term can mean big payoffs down the road.
Get creative. If you’re cash-strapped, look for creative ways to stretch your dollar. If you can’t give a material gift, consider giving a service like a free night of baby-sitting or petsitting when the giftee goes out of town. Also think about sharing the costs of a gift with friends and family. Entertaining at home with friends? Opt to make it a potluck to save a little cash.
Shop the sales. Now that you’ve identified all the big events, be flexible and look to make purchases throughout the year. Think about hitting offseason holiday sales so when December rolls around, you won’t be fighting the masses on what feels like a tight budget. Also stock up on sales of nonperishable items at grocery stores that you can use for entertaining later in the year. Shopping sales will help spread the spending burden over multiple months instead of two or three.
Make up the difference. If you exceed your budget for an occasion, make up the difference before the next big event rolls around. Consider selling unused items, canceling services that you don’t use often (think subscription services, gym memberships, etc.) or try a no-spend week that will help you get back on stable financial footing.
Take the time to create a milestones budget, and start saving now to prepare for expenses throughout the year.
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How to Budget Now for the Year’s Big Milestones originally appeared on usnews.com
