Peer Into Your Crystal Ball

It seems like every time you turn around, something needs replace or repaired.  Our minivan recently needed new tires.  Our pickup may need to be replaced in a few years.  The house needs painting soon.  The list goes on and one. 

The good thing (if you can call these repairs good) is that we already know that we will have to pay for these repairs/items.  So, we will be prepared for them when they come.  We of course couldn't’t put the tires on ourselves.  My husband has vertigo, so will be unable to paint our home and unfortunately, new pickups are not in specially marked boxes of Cheerios.  So, that means we have to prepare and save.

When you save, you will need to set up several “pots” in which to place your money.  Of course, always be sure that you have at least 3 - 6 months of money saved for your emergency fund, but also be sure to save for your home repairs.  Be sure to earmark money for saving for that new vehicle.  And don’t forget about the holidays!  EEEEKS!!  How will I ever remember and plan for all of this?? 

What worked for us, was our "Five Year Budget.'"  We know that in five years, we will need that new pickup.  So, we have forecasted what that will cost and divided it by the number of months until we need to act upon it.  For example, if we know we’ll spend $15,000 on that pickup in five years, we divide $15,000/60 months and that equates to a monthly savings of $250.00. 

We also know that the house will need repainting in 3 years (or less), so we have determined that it may cost us around $5,000 to have this done.  So again, we used our standard formula of $5,000/36 months or $138.00 a month.

Of course, who knows if other things will come up between now and the time we are ready to make our purchase.  Perhaps the pickup won’t make it five years  - at least we’ll have some of the money we need for that down payment.

None of us has a crystal ball, but we all KNOW many of the financial obligations that lie in our future.  By simply planning ahead, you’ll be more prepared to face them head on.  And the best part – you can pay for them in CASH!!!