Some of the best things in life are… expensive.
Milestones like going off to college, buying a house or starting a family can drain your bank account — which can lead to some major financial stress.
Advance planning, however, can combat some of that anxiety. Budgeting can help you prepare for the big — and little — things life throws your way. After all, a budget is just a plan for your money.
Here are six situations where budgeting now can reduce financial stress for you later.
1. Going Away to College
Repeat after me: Student loans are not free money.
It’s easy to use your refund check to fund all the hidden costs of college, like extracurriculars and decorating your dorm. But you’ll be kicking yourself when you’re struggling to pay back those student loans 10 years later.
Take a step toward adulting and make a budget in college that’ll give you a realistic view of whether you can afford that spring break trip or if you would be better off picking up extra shifts at your part-time job.
2. Moving Into Your First Apartment
Moving into a new place takes a lot of upfront cash. There are application fees, security deposits and first and last months’ rent to fork over before you can get a set of keys — and then you’ve got to pay the movers.
This guide on saving up for your first apartment lays out what you need to consider before moving out on your own. It’ll help you decide what you really can afford.
Having a roommate can help lower your living expenses, but here’s how you should screen potential roommates before signing a lease together.
3. Buying a House
Buying a house is not something you just do on a whim. It’s an entire process, part of which involves saving up a large sum of money.
Give yourself time to save for a house, setting aside room in your budget to add to your down payment fund each month. And don’t just focus on the money needed to get you in your home. There are a bunch of ongoing homeowner expenses to consider, like maintenance and HOA fees.
4. Having Kids
Oh baby, kids can be expensive. And while it feels awkward putting a price tag on your plans for a family, it’s wise to go into parenthood knowing you have the adequate financial resources.
Our guide to budgeting for a baby runs down the many costs you can expect in the first year — from a crib to child care.
As your baby grows up, your expenses will change. You’ll need to adjust your budget to keep up. Turn to these tips to help you save on children’s expenses, especially if you’ve got multiple kids.
5. Career Changes
Having a budget can help you through the ebbs and flows of your professional life.
If you’re dealing with a period of reduced income (like if you lose your job or take time off from the workforce), you’ve got to determine how much money you need to cover the basics. Look to see what unnecessary spending you can cut out of your budget.
Conversely, if you get a raise or a new job with a better salary, budgeting that extra money instead of mindlessly blowing it will set you up for a better financial future.
No one wants to get to retirement age only to realize they don’t have enough money saved up to sustain them in their golden years.
That’s why it’s crucial to add retirement contributions to your budget now so you’re not worrying about your savings (or lack thereof) when it really matters. Reduce financial stress by getting an early start on retirement planning, so you have more time to let compound interest work to your best advantage.
But if you missed your chance at adding to a 401(k) plan in your 20s, don’t fret. This advice about how to save for retirement at every age will get you closer to saying goodbye to your working days with confidence that your money will last.
Nicole Dow is a senior writer at The Penny Hoarder.