Transitioning from the end of one year into the next is the ideal time to start planning. You can look at the year holistically and identify any financial conflicts or opportunities early on. Either way, you’ll be more prepared for the big expenses you say “yes” to and know when you need to so “no” or “not right now.”
To plan ahead for the upcoming year, consider the following expenses:
Travel
If you don’t typically plan ahead for travel, now is the time to start! Begin by taking stock of your annual trips such as spring break with your friends or visits home for the holidays and look back to see how much you have typically spent on them in the past. This will give you a guideline of what to shoot for this year too. Then, think about where else you might want to go. A quick search of flight prices and accommodations will help you start to assess how you could make those trips work this year.
Weddings/Special Events
Take a glance at your fridge for any “save the dates” and rack your brain for friends or family who have gotten engaged recently. If any of the weddings are out of town or involve more than just being a guest (i.e. you are a bridesmaid or groomsman), start estimating your costs including travel, accommodation, gifts, clothes, hair, makeup, and bachelor/bachelorette parties. This brainstorming should also include other big events such as a major anniversary or milestone birthday you will celebrate with someone.
Moving
If you rent your housing, identify when your lease is up this year and start thinking about whether you’d consider moving. If you already know that you’re likely to move, start planning for the upfront costs. How much would your deposit likely be? How about movers? How much more or less expensive are the places you’d like to move to? You don’t need to know the exact amounts, but start ballparking it.
Car
If you need to buy or lease a car this year, assess your cash for a down payment fund or start building one up now. If you are in the market for a specific car, you should start your search early as it could take months (or even as long as a year) to get a specific model. Thinking about this early can also give you the time to make moves to improve your credit score to secure a lower interest rate.
Gifts
You might still be reeling from your holiday spending this year, but now is still the best time to start planning for next year. First off, since you made the purchases recently, you probably have a pretty good idea of how much you spent on gifts this year, which is a good barometer for much you should aim to save. Secondly, starting now will give you the longest timeline (and therefore the lowest monthly amount needed) to save up for next year.
