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On The Money –
A Financial Wellness Series
On The Money –
A Financial Wellness Series
Saving for a Purpose
What to Consider When...
Non-Traditional Ways to Save
While immediate gratification feels good, it's important not to impact your long-term financial security. You can plan smartly to pay for bigger things like a wedding, a home, or buying a car without going into unmanageable debt.
General savings advice can be found in our Basics of Personal Finances blog. This includes things like having emergency savings, paying down debt, and, most importantly, creating a budget. But how do you save with a purpose?
You’ll typically have a set beginning and end and dollar amount needed. It’s a good idea to open a separate account specific to your saving goal to ensure the money you use is for that purpose and isn’t accidentally taken from emergency savings or money needed toward paying down debt. Consider opening a high-yield savings or other investments to make your current funds grow faster.
Regardless of what you’re saving for, the first thing you should do is to establish a budget and stick to it. For big, exciting life investments it's easy to get carried away and spend more than you can afford. If you haven't made a budget, this can be scary but reviewing your past expenses for the previous few months can help you get an idea of your spending habits.
Having a place of your own can feel amazing. But there are many considerations that go into buying a home. Read more about that in our blog “Buy or Rent? The Pros and Cons.” Based on your current finances, how much can you afford to spend? Along with
mortgage loan payments you’ll need to consider costs associated with a down payment, insurance, and general home maintenance.
Having children is a joyful but often expensive life event. When you’re ready to take that step be sure to think about the impact it will have on your wallet. With a new person to care for, you’ll need to allocate your money differently. But reassess often: as your child gets older, needs will change and the plan you have for a baby may be different for a toddler or schoolage child. Also, don’t forget about employer benefits like health insurance and flexible spending accounts, or government programs that can provide financial assistance.
Love is a wonderful thing…trying to newly navigate the finances between two people can be a bit more complicated. Having a conversation about money before marriage is vital. It’s important to discuss spending and saving habits, how or if you’ll combine incomes, and where the responsibility falls for making various payments. Plus, you’ll want to have a plan for the future that you both agree upon and work toward together.
Buying your first car can be exciting, but it’s also a big investment – make sure you do it without regrets. It may be tempting to buy a flashy sports car, but you need to decide what you can realistically afford. You’ll have a monthly car loan payment as well as additional recurring costs such as insurance, maintenance, and fuel. And think about how often you drive. If you work from home or have public transportation readily available, do you need to buy a vehicle with tons of extra features you won’t use? Be practical. Remember, you don’t have to live like your favorite influencer…your wallet will thank you later.
Aside from a dedicated savings plan, think about these non-traditional ways to save or begin with these small everyday changes you can make.
Fixer Upper
Purchase a home that needs some repairs and renovations. While it requires more effort, the initial purchase price may be lower.
Embrace Secondhand
Buy used furniture, appliances, and other household items instead of new ones.
Rent Out Space
If you have a spare room, consider renting it out. This can offset your living expenses and accelerate your savings.
Reception Only
Have a private ceremony (or elope!) and save your money to celebrate with friends and family by just having a reception.
Timing
Select off-season dates or choose a weekday or Sunday wedding. The time of year and day of the week can have a big influence on how much you’ll be charged.
New or Used
Rent outfits, buy used, or borrow. Make your own decorations and invites, which can add that personal touch to your big day.
Resell Items
When your child outgrows clothing, toys, or gear, resell them to recoup some of your initial investment. Look to consignment shops or online marketplaces.
Homemade Toys & Activities
Get creative and make your own toys and sensory activities using household items. Pinterest and YouTube offer endless ideas to get you started!
Free Resources
Visit your local library for free story times, playgroups, and educational programs for children. Look for free family-friendly events and activities in your community.
Consider Used
Vehicles begin losing their value almost immediately. The savings you can reap with a car a few years old (versus a brand-new car) can be huge.
Define Your Needs
Are those extra features a need or a want? Every feature adds more to the cost of the vehicle.
Time of Year
Car dealerships often have sales and promotions at the end of the year or during specific holidays
Next month in our Financial Wellness Series: How to Protect Yourself from Scams
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