Budgeting For Big Life Changes: Marriage, Children, And Beyond

Adulting throws so many changes at you, sometimes all at once. Budgeting can help soften the blow of life, as it helps you prepare for big life changes. Preparation will always make life a bit easier.

Her Agenda spoke with a few experts that have garnered tips on how budgeting your finances will make for a rewarding outcome for big life changes you’ll experience.

“Aside from budgeting, your credit score is one of the most important factors that can help you achieve some life milestones like getting an apartment, car or homeownership,” said Lauren Bringle, Manager of Customer Experience and Operational Content at Self Financial, Accredited Financial Counselor. Payment history is the largest factor that affects your credit, and accounts for 35% of your total FICO credit score. 

Treat your savings account like your best friend. Check up on the account regularly, set up automatic deposits, and watch the account flourish.

“Open a separate account and treat saving like a bill,” said Dr. Erika Rasure, Ph.D., Chief Financial Wellness Advisor at Beyond Finance. “Even small contributions add up over time.”

“Kids arrive with a lot of expenses associated with them — diapers, medical care, childcare, and ultimately college funds,” said Lucia Lu, Senior Consultant at Nextpins. “Begin with an account set aside specifically for the needs of your kid. Open a 529 account to save for college and begin paying into it on a monthly basis, even if only a minimal sum. Initiate a monthly savings amount to cover baby needs and ensure you budget for any fresh expenses (a larger vehicle or extra insurance protection).”

Children are expensive, so planning for anything that may arise (because it will) is your best bet. No matter how big or minute you are saving monthly, just remember a little goes a long way.

Having physical money often puts things into perspective. Taking an allotted amount of cash out will keep you on track, because once it’s gone, it’s gone.

“Start handing over old-fashioned bills for your routine expenditures,” said Austin Kilgore, finance expert and analyst with the Achieve Center for Consumer Insights. “Consumers generally spend 15%-20% less when paying with cash than with a credit or debit card. To avoid using the plastic, some people take credit cards out of their wallets. Some even freeze their credit cards in a bowl of water in the freezer. The time it takes to thaw it out can serve as a deterrent, or at least provide time to really decide if you need to use it.”

“Merging finances with a partner, you should initially open a joint checking account to cover common expenses,” said Lucia. “Your household bills, food, and other common expenses are managed more easily with this type of account. For individual expenses, you should have separate accounts to cover personal needs. Using a budgeting app to track common and individual finances helps both partners stay on track.”

This can be a big step to take with a partner, whether married or living together, but is essential. If there is a joint account, it can be easier to save for other goals and plans in the near future.

Planning ahead for unexpected occurrences will always work in your favor. You never know when an accident, emergency, or something will break.

“Things come up, and unforeseen expenses can derail the best-laid plans,” said Lucia. “From medical bills to fixing the roof to an unexpected family vacation, you need to have an emergency fund. Shoot to save between three to six months of living expenses within a high-yield savings account. This offers protection without reaching for credit cards or loan payments.”