Prepare for these expenses.
Those who have a financial plan accumulate three times more wealth than those who don’t. Put another way, by approaching finances blindly, you are likely to be three times worse off than someone who has a plan for their money. Planning is so important.
Thinking about future expenses can feel challenging. There are obvious items you plan for in our budget (fixed and obvious variable expenses come to mind), but there are some less obvious ones, too, and ones that can greatly impact your budget or become the reason you rely on debt. What can you plan for when it comes to your money?
When you’re creating your budget, think through the list below. How does each item fit in your budget, so that you are prepared for these expenses when they come? How much do you need to set aside for retirement to be ready? How much would it take each month to set your kids up for college success?
Nearly every one of these expenses will occur, even if they don’t occur now or wont for many years (like retirement). Thinking ahead and incorporating them into your budget, along with your regular fixed and variable expenses, means you will be prepared for them when they arrive, whether it’s next week or in twenty years.
Retirement
Children’s college or your future education
Income/Property Taxes
Income changes
Moving
Job/Career changes
Travel
Home repairs/maintenance
Vehicle repairs/maintenance
Medical procedures
Children’s activities (sports, plays, travel, tutors)
Changing seasons
Meals (what’s for lunch? What’s for dinner?)
Social events
Gifting
By planning for these expenses, you will reduce the amount of available income you have now for things you want, but you’ll be sure to capture things that are important to you, avoid debt, and ensure you plan for future you.