Between targeted Facebook ads, online shopping, and the ability to have anything you could ever want shipped right to your front door, spending money is easier than ever. And it’s no secret that when spending is made easy, saving is made difficult. But the best things in life have never been easy, have they?
In order to embark on the vacation of a lifetime, you have to set aside the funds. Similarly, if you want to remain calm, cool, and collected when unexpected expenses hit, you have to save in advance. And before experiencing the new homeowner high, you have to endure years of saving for a down payment.
With that in mind, here are three things you should start saving for, now.
Your Next Vacation
When it comes to vacation planning, the amount of money you allocate for a trip can make or break the whole shebang. For this reason, it’s important to set a savings goal and timeline when planning your next vacation.
But how far in advance should you begin saving, you ask? Well, it all depends on the kind of vacation you have in mind. If you’re planning on traveling somewhere nearby, you might be able to get away with saving only a few months in advance. But if you’re looking to travel across the country, or even abroad, you’ll likely need much more time to save for your trip.
Once you know where you’d like to go, you should consider the expenses associated with turning your dream vacation into a reality. Will you drive or fly? Will you stay in a hotel or book an AirBnb? What will you do and eat once you get there? Nearly every facet of your vacation will cost you, so it’s important to start saving in advance.
Like life, our expenses aren’t always predictable. We don’t get a heads-up before our car’s timing belt goes out. Our washing machines usually don’t let us know when they’re ready to retire. And sometimes, we even have to throw baby or bridal showers that we didn’t budget for.
No matter what your unexpected expenses look like, it’s essential that you have money set aside for when they come along. If you’re having trouble setting a savings goal for unforeseen expenses, it might be a good idea to look back at last year’s spending. Try to recall any unexpected expenses you incurred. Did you have to replace any furniture or appliances? Did you pay out of pocket for any dental, vision, or hearing exams? These are the kinds of questions to consider when saving for future unexpected expenses. It’s also not a bad idea to read through some of the most common unexpected expenses and see which are applicable to you.
A Down Payment
If you’re just starting out, saving for a down payment might be the last thing on your mind.
But according to a recent study, it pays to begin the savings process while you’re young– especially if you hope to have enough for a down payment by the time you’re 30.
If you start saving at age 22, for example, you can expect to set aside anywhere between $287 and $2500 each month depending on where you live. This may seem like a lot if you’re just starting your career, but this number grows larger the longer you wait. Even waiting an additional 5 years to start saving can make the task much more daunting. If you start saving at age 27, for instance, you’ll have to set aside over twice as much each month to have a down payment by the time you’re 30. So if you know you’ll want to purchase a home one day, why not start saving now?