How will your budget change as your financial responsibilities shift?
Thats what were looking at this week.
This weeks question is from Sara:
Im curious about whether your budget should change as life changes.
I have two little kids so have high daycare costs, and also am paying off student loans.
Is that dangerous wishful thinking though?
This is true across groups of people as well as in an individuals life.
With that will come some relief, and the need to reformulate your plan.
Once that money is freed up, then you better examine where you stand financially, says Huddleston.
That should give you some peace of mind as you work toward a larger cash cushion.
Your next priority should be saving something for retirement.
Becauselifewill happen, and you may be unable to adequately afford payments.
That might include making additional debt payments or putting a bit more toward retirement.
Its up to you to play with.
I dont think its wishful thinking to think that they can save more, adds Huddleston.
This is especially important with children to support.
Then decide how to allocate what you have left.
Speaking of which, they can obviously feel like a huge burden thats weighing on you and causing stress.
For example, the average annualized return of the S&P 500 wasaround 11.7 percentfrom 1973 to 2016.
Thats a lot higher than your student loan interest payments.
See if you qualify for the student loan interest tax deduction.
But dont miss out on the match.
To that end, automate as much as you’ve got the option to, as McBride suggested.
As those bills change, so will your budget.
As long as youre keeping track, youll be fine.
