How to Prepare for Major Expenses

man and woman looking through finances

7 Ways to Prepare for Major Life Expenses

We all have so much going on, from work, to school and after-school activities for the kids, to bills, home maintenance, and the rest of life. With as much as we have going on day to day, it can be hard to look forward enough to plan for the bigger things: college expenses, buying a home or remodeling, getting a new car, and so much more. It’s no wonder that a recent survey showed two-thirds of us have less than $1,000 put away, or no savings at all.

Making major outlays of cash can be daunting to think about. Take homes, for example. The median home price in the Kaukauna area is up to $135,000. A typical 30-year mortgage with 20 percent down would mean spending $27,000 up front. The average remodel costs families up to $36,000 for a decent-sized house. College costs are also on the rise. The average 4-year public in-state college costs $9,650 per year – for tuition alone! Even a smaller expense, like a $1,000-$2,000 down payment on a new car, typically requires some planning over time. This certainly isn’t the kind of cash most families have laying around.

So how can families prepare for major life expenses? Planning is key, but finding the extra funds to put away is just as important. Here are some tips to save money in little, and bigger, ways that really add up over time:

  1. Set up automatic savings transfers. Many of us have a 401k plan from work, but did you know you can also have deposits automatically put into a regular savings account every paycheck or month, too? It’s true, and putting money away like this is a great way to build up savings without having to think about it.
  2. Budget ahead of time. Whether it’s a new family expense, holiday gifts, or something even larger like a home purchase, it helps to break the amount down into how much you need to save per week or month to get to your goals. Doing it this way makes saving much more achievable.
  3. Cut down on the “little things”. Daily expenses we take for granted really add up over time. If you buy a $4 cup of coffee at a chain store every weekday, that’s $1,044 a year you could put away by skipping your drink, or cut the expense down drastically by making a cup of joe at home instead. Do you eat out for lunch at work? Bringing food from home can save you big over time, too. Small changes can have a big impact.
  4. Make a list, and stick to it. Speaking of food, make meal planning a regular part of your weekly routine, and create a shopping list based only on what you really need from the store. Avoid impulse grocery purchases and you’ll see your grocery bills go down each week. Not only that, but planning meals out in advance saves in other ways, by reducing the number of times you may resort to “quick fix” foods, for example.
  5. Compare prices. Before you make that big purchase, shop around. Look at several stores and write down the offers you see to make sure you truly get the best deal.
  6. Seek out better deals. For standard expenses, check from time to time to see if you can negotiate a better deal or find an offer from a different vendor. Whether it’s asking your cable company for a special package or shopping around when your car insurance term is almost up, you may be able to cut down your monthly expenses. Better yet, if you aren’t really using some of the services you pay for, consider cutting them entirely.
  7. Mind your car maintenance. From keeping your tires properly inflated to replacing air filters and getting oil changes, standard car upkeep will go a long way towards not only making your car last longer, but also saving you on gas each week.

Unison has additional information regarding setting up savings accounts. Come visit us to learn more about how to be better prepared and plan for those big purchases!

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