It’s Not Worth Going Into Debt For These Life Events
Maybe you’ve been dreaming about your wedding since childhood, but you probably didn’t count on $5,000 dresses, or the struggle of finding a venue. Unfortunately, some of life’s happiest moments can also be the most expensive. Not to mention, it’s easy to convince yourself that these special events are worth the big spending. However, the best times of your life shouldn’t put you into debt, so before you buy a new car or splurge on a trip to Europe, consider these five life events that aren’t worth going into debt over.
Finding that special someone to spend the rest of your life with is definitely something to celebrate, but you don’t want to begin your life together in a financial deficit. Wedding experts at The Knot estimated in 2018 that the national average cost of a wedding is roughly $34,000. To put things into perspective, you can buy yourself a hot new car for that much or less.
Before booking a grand venue or signing on that expensive dress, take a moment to iron out a wedding budget. You can have a beautiful wedding and watch what you spend at the same time. Imagine how far the rest of your budget could go – a nice honeymoon or new house.
College Tuition For Your Child
Don’t feel guilty about not paying tens of thousands for your child’s college tuition, or at least, that’s what the experts are saying. Your children can easily take out loans to go to their university of choice, but you no one is going to let you take out loans to retire. College is a great investment for their future, and student loans shouldn’t ruin them – despite what recent grads may claim.
In addition, your kids will most likely receive better student loan deals than you would, as Direct Plus Loans for parents generally have higher interest rates and less leniency when it comes to paying them back. While helping out financially on occasion is wonderful, as all parents want their kids to succeed, don’t put yourself on the hook for student loan payments.
Whether you’re the type to keep the same car for a decade or switch it up every couple years, owning a vehicle isn’t cheap. Even so, it gets especially pricey if you’re looking to buy a brand new vehicle. Kelley Blue Book estimates that the average price for a mid-size car is $27,968, and most people don’t have that much just sitting in the bank, ready to spend.
Buying a brand new car isn’t even worth it, seeing as new cars lose around 23.5% of their retail value after a year and about 60% in the first five years, according to Edmunds. This means your brand new vehicle will generally decrease in value by nearly $10,000 within the first year. Yikes. Instead, try buying a less expensive or used car. They’re generally very nice, and gentler on your bank account.
Maybe it seems like your friends post their fancy vacations on Instagram every week, so it can be tempting to pack a bag and start jet-setting. Just don’t get carried away. Flights, hotels, food, and other expenses all add up, and you won’t feel so relaxed and refreshed when you come home to all of that credit card debt.
Try setting a savings goal before you book your ticket. This way, you’ll be less stressed about money, and you’ll know you’ve worked hard to truly earn your vacation. If you simply must go now, do your research on great travel deals and cheap alternatives to the five-star hotel you’re tempted to stay in.
Birthdays And Holidays
Everybody likes to celebrate those they love by showering them with gifts, but your family and friends will understand if you need to set a budget. That means you don’t need to buy your significant other a $500 watch for their birthday or give your children ten gifts each on Christmas.
Let’s be honest, expenses for birthdays and graduations can go beyond presents. They often include a nice dinner, a new outfit, and party food. Spend your time instead of your money on your loved ones, or try setting a budget for how much you’re willing to pitch in for your friend’s graduation party or Valentine’s Day.
The Big Moments
Life is a journey, and you should definitely be excited about the big moments. Just don’t let your spending get out of hand. The most beautiful wedding is one where you’re surrounded by family, friends, and your beloved – not a fancy affair with flying doves and a top-shelf open bar. Also, a used car can be your best companion, and last you many, many years if you take proper care of it. There are plenty of ways to enjoy the finer things in life without spending beyond your means. Your future self will thank you.