The Roaring 20's
Being in your 20’s can be a strange time of your life. Some people you know are having a baby, while others are out partying every night. One of the most nerve-racking and surreal situations for many people in their 20’s are their personal finances, but more in particular, saving for those big events in life such as a wedding, engagement ring, or purchasing a home. In this blog, I’m going to go over some key ways to help these big dreams be more obtainable.
When trying to achieve these goals, the main thing everyone will tell you is save, save, save! It’s easy to tell someone to save but becomes more difficult when they ask, “What are the easiest ways to save?”
The first answer that popped in my head was creating a budget. Try to determine, or at least estimate, when these events will happen. If someone decides they want to propose to their significant other, they can plan out the date they’d like to make the purchase, and then estimate a monthly amount to save. For example, someone wanting to buy a ring in a year and a half, costing $5000, can break down that cost to around $280 a month. By breaking this down, you are able to adjust this cost to a monthly budget. Many people will even push engagements for longer than expected to build up the savings necessary for this large goal. Remember, you don’t want to deplete your emergency fund or run up your credit cards for these large purchases.
Besides budgeting, cutting out items that aren’t necessary can play a big part in saving for these big occasions. Items that are name brand can be switched with store brand items that taste the same but aren’t largely advertised. Same goes for buying expensive clothing or a vehicle. Just because something is expensive doesn’t make it high quality or better than a more affordable alternative. Just be cautious because a cheap item doesn’t stay cost-efficient when it is always needing repairs. The same goes with these big life purchases that were saving for in the first place. Spending $10k on a wedding cake is unobtainable and not necessary for most young adults in their 20’s paying for their own wedding. The same goes with purchasing a house that is far more expensive than one you can afford.
Speaking of buying a house, most recommend being able to put 20% down on their purchase. By doing so, you avoid the cost of private mortgage insurance, which can cut down on your budget quickly. Also being aware of other closing costs that may be associated with your big purchase is important to know when budgeting in advance. Overall, coming up with a plan and budget is the key to achieving your goals of finding the “one” and “settling down”.