Life can be both expensive and unexpected. The list of basic essentials that we all need to live in the day-to-day can add up – fast! Between the cost of transit, car repairs, a rent or house payment, food, a spouse and (dare I even say it) kids – you’re looking at a pricey world of potential expenses to budget for.
Let’s pretend you’re thinking about getting engaged. You and your soon-to-be-spouse are ready to dive into life as full-fledged adults. We’re going to walk through what type of expenses you might be facing, and how you can be proactive and budget accordingly.
Getting Married
So, one of you finally popped the question – you’re getting married! Nowadays, the average cost of an engagement ring is upwards of $5,500 (in 2018), and that’s probably not including the wedding band. Yes, my friends, you’ll likely need to purchase another ring to go along with the one you just bought. What a time to be alive!
Now, let’s talk about the cost of their wedding. On average, the cost of a wedding in the U.S. is right around $33,000. However, many folks living in and around New York City have weddings that end up costing just under $77,000. And with the Pinterest-wedding-planning age in full-swing, that number isn’t likely to fall anytime soon.
The good news is that you aren’t the average bear! You can’t be fooled by these inflated wedding expenses. You want a low-key wedding, so you’ll be keeping the big day small and putting the vast majority of your combined savings toward a down payment on a house with a little bit more room to grow (good call).
To cut expenses, you can either choose to go the super inexpensive route – scampering off to the courthouse and getting married by a Justice of the Peace – or having a tight-knit group of family and friends come to witness your nuptials and celebrate with a small, bring-a-dish-to-pass style lunch afterwards.
There are so many different ways to limit what a wedding can cost, and it’s a relief to know that because you’re proactively planning for your wedding, you can get out in front of some of these big-ticket matrimonial expenses.
Finding Housing (And Transportation, and Literally Everything Else)
Millennials are dubbed the eternal city dwellers, but that’s not a catch-all. In fact, Heather and I spent 10 years in NYC before moving to the suburbs. For most, the flight to more space is a natural progression because, when the kids get here, you will need space.
You and your spouse-to-be know that the home buying process isn’t to be taken lightly, so you’re already checking out my two posts on millennial home ownership (hint: you really need to check these out – yesterday):
HOME BUYING FOR MILLENNIALS – HOW TO BUY YOUR FIRST HOME: PART 1
HOME BUYING FOR MILLENNIALS – HOW TO BUY YOUR FIRST HOME: PART 2
You know what else you can be doing? Making a list of all the other expenses that come with being a homeowner (and an adult in general). This list includes:
- Preparing for home maintenance (1% of your home’s purchase price each year is a good rule of thumb to follow)
- Homeowners insurance (between $600-1200 a year)
- Transportation/commute costs (from owning a car, to a train ticket that gets you to the office each day)
- Cost of cable/internet/utilities/Netflix/Spotify
- Property taxes
- Food
- The cost of saving to travel and, you know, enjoying the money you work really hard to earn
All told, average living expenses could robe anywhere between $24,000 and $60,000. And that’s not including a home down payment, the cost of a new car, any travel or extracurriculars, or loan payments you’re dealing with.
Having Kids
Congratulations! You’ve found the perfect first home for you (thanks to my sage advice, of course), your spouse, and first child. But guess what? You have a new expense to consider – your first born child!
How much will your first child cost? Well, that really all depends on where you’re living. The average cost to raise a child in New York is around $99,000 annually, but cost significantly decreases to about $58,000 if you’re looking to raise your children in a more rural part of the country.
Key Takeaways
So, what’s the moral of this story? The cost of a nuclear family can range from $300,000 to $500,000 depending on the factors that we’ve covered above including marriage, housing, geographic location and children. Yeah – settling down and starting a family can be expensive.
Major life events may seem to come out of nowhere if you don’t prepare ahead of time. Being reactionary is not the way to go – you want to be as proactive as possible when it comes to your money. Whatever life brings you, you can feel financially prepared if you do the legwork ahead of major life events like getting married, buying a home, or having kids. Still stressed?
Luckily, you don’t have to go this alone. You have an endless well of financial literacy right here at Bone Fide Wealth.
You also have the opportunity to reach out to friends and family who have already done this whole raise-a-family-and-make-it-look-easy thing, and you can get ahold of a trusted financial planner to help walk you through the basics of getting a solid financial foundation in place.
Related Articles:
[VOX] VIDEO: Want to Buy a House? Here’s 4 Things You Should Know.
[VOX] VIDEO: What To Have a Family? Here’s What it Will Cost You.
[NerdWallet] Ask Brianna: How Can I Afford to Have Kids?
[MarketWatch] What NOT To Do When You’re Closing on a Home
