Our 20’s and 30’s are exciting times filled with a lot of change. Many of us graduate, begin careers, move, change careers, move again, and hopefully once the quarter-life crisis settles, we eventually settle down in one place and with one person. During this time of upheaval, some big expenses may pop up, usually well before we hit the point in our career when the words “disposable income” become more than just a pipe dream. And we all know we should be doing more to save and plan, but sometimes knowing that we should do something doesn’t make it any easier to actually start doing it.
Worry not. There are things that can help. Well, one thing in particular.
Behold… You Need a Budget (YNAB). The personal budgeting web app (with companion Android and iOS apps) that’s particularly easy-to-use and guides you every step of the way, enabling you to budget and plan for the big things that seem unattainable.
We teamed up with them to identify five high priced items you’re likely to encounter at some point in your 20s or 30s. And even if all don’t apply to you, odds are ONE does, and that’s good enough. YNAB begins the budgeting process with four easy rules to help you stop living paycheck to paycheck, get out of debt, and save more money faster. Here’s the breakdown:
Rule 1: Give every dollar a job.
Treat your budget like a business (with you as the boss and your dollars as the employees) and assign each dollar a job or a task to-do.
Rule 2: Embrace your true expenses.
This rule is great because it helps you save for unplanned or irregular expenses. You set aside small amounts of money each month for a specific rainy day fund so you’re not caught off guard when these items pop up unexpectedly.
Rule 3: Roll with the punches.
While you give every dollar a job, there will be times that things don’t work out exactly as planned. Rolling with the punches is all about your ability to handle overspending and create a plan to fix it. Plans change, and your budget can and should change as well.
Rule 4: Age your money.
Expand the time between receiving and spending money. Instead of spending money that arrived yesterday, spend last week’s money. And then last month’s money. This helps to create stability and flexibility to deal with whatever expenses come your way. Trust us, this concept feels amazingly simple and doable.
With these four rules, budgeting isn’t a restriction—it’s about how to do more of the things that matter most and having total control of your money. So using these four rules from YNAB, what are the big expenses we should be saving up for now? Here are our top five:
1. Student Loans
Source: The Everygirl
Like most graduates, paying off loans was a huge part of my monthly expenses, and something I needed to be really careful about budgeting for. I didn’t want to be paying off my loans when my (future) kids were going to college, so figuring out how to make it a priority in my budget was really important.
Whether you have $5,000 in loans or $50,000 in loans, budgeting to pay off your student loans in your 20’s (and 30’s) will set you up for happy and stress free long-term success.
2. Car
Source: Kim Genevieve
A car is one of those sneaky big purchases that most of us need, but few of us plan for. Imagine waking up tomorrow and needing to replace your car that has broken down. Would you have enough saved so you could shop semi-stress free? While the dealer at the lot is always more than happy to offer you a loan for 0% down and high monthly payment for the next 72 months, with a little bit of planning you could put yourself in a much better position.
3. Down Payment
Source: The Everygirl
I remember when I first graduated college, 99% of people I knew rented—it was a given that none of us were even considering buying a home. But a couple of years later my roommate asked me to come with her to look at an apartment she wanted to buy, and I was shocked. We had the same salary, so how was she all of a sudden able to buy an apartment while I was still nowhere near the point where I could buy one? She had started budgeting for it the day we graduated and had built up a small nest egg that gave her the option to buy a home when the right opportunity came up.
Buying a home is the biggest expense most people will have in their life, and coming up with a 20% down payment can feel impossible. If you start budgeting for it early, when the time comes that you want to put down some roots, you’ll feel much more comfortable with your options.
4. Dream Trip
Source: SF Girl By Bay
My dad loves to remind me that “youth is wasted on the young,” meaning that in our 20’s (and 30’s) before we have major obligations, we should be making the most of our freedom. For a lot of people, that means taking the time to explore the world, visit new places, and take a dream trip. It may seem self-indulgent, but embarking on a dream trip is exactly what you should be doing (if it’s one a priority). I’ve been saving steadily for my dream trip (South Africa!) and I know that all this planning will be worth it when I’m finally there.
Plan for it, save for it, and enjoy it. You deserve it.
5. Wedding
Source: The Sweet Petite
The average wedding in the US costs $32,000 and is significantly more when you live in a big city. Even “budget” weddings can cost thousands. And there’s nothing that will bring you down from the post-engagement high faster than the stress of how you’re going to pay for the wedding. Regardless if you’re dreaming of a lavish affair or a courthouse wedding, setting aside a little money in your budget to fund it will leave you feeling significantly ahead of the game when the time comes to start planning the big day.
Now that you know the five things you should begin saving for, it’s time to actually put your plan into action. And if you’re ready to both budget and learn how to live differently, YNAB also offers free, daily online classes to support you through whatever financial stage you’re in.
And one last thing to make budgeting for these items even easier: Get YNAB free for 3 months by clicking here (no credit card required!). For all students out there, YNAB is completely free for you to use!
This post is sponsored by You Need a Budget (YNAB) but all of the opinions within are those of The Everygirl editorial board.