5 Future Expenses We Should All Be Saving For

The following is a guest post by CT at Debtpayer, a personal finance site detailing CT and his wife’s struggle to pay off nearly half a million dollars in debt.

We all do it from time to time: we sit around and everything appears to be smooth in our financial lives, so we get complacent. We are paying all the bills as they come in. Debt is decreasing or non-existent. Food is on the table and work is going pretty well, thank you very much. The problem is, sometimes you can get so caught up in the pleasant present that you begin to forget all the future expenses we should all be saving for. Not to ruin your mojo, but here are 10 future expenses we should all be saving for.

5 Future Expenses We Should All Be Saving For:

Future Expense #1: Retirement
It’s obviously the biggie, so I figured I might as well just put it out there. Retirement is one thing almost everyone hopes to do at one point. Even if you’re a workaholic, the fact of the matter is your retirement may at some point be out of your control. This is perhaps the most important future expense we should all be saving for. If you are lucky enough to receive a pension from work then you are ahead of the curve. A 401(k) match is another benefit you should max out. Even still, having some IRA’s or other tax-efficient retirement plans in your name and under your control is likely a good idea.

Future Expense #2: Cars
There is nothing worse then having to take on a car payment on top of everything else. It follows that if you can, saving money so you can purchase a new or used car in cash down the line can save you thousands of dollars in interest. Sticking to a basic dependable car is another way to ensure you have a nice car without the resultant unpalatable car payments. A few years back I purchased a brand new Chevy Cobalt. It was a good bargain, and although I may now question whether I should have bought it new or not, I never question my decision to immediately start saving for my next car, even though I plan to drive this one into the ground. ING Direct savings accounts are a great way to name different accounts and use them as “funds” for different future expenses.

Future Expense #3: House Repairs/Other Large Expenses/Emergency Fund
The logic is the same as with the cars: you want to make sure you have the extra money when that water heater breaks, you need new septic, or god forbid, someone gets sick or loses a job. Having the extra money for when these unexpected life events occurs gives you not only peace of mind, but it also puts more money in your wallet. If you force yourself to save the money now, you will begin to miss it less and less as you get used to increasing your savings. It is also often important in the present to make sure you have proper insurance. I know that disability insurance makes me feel a lot more comfortable. Even though I am in my twenties I know that we are all to some extent at the mercy of fate. Supplemental insurance such as through Aflac is another way to ensure you can stay financially afloat if something unexpected occurs.

Future Expense #4: Entrepreneurship
I am a firm believer that just about everyone should try their hand at some entrepreneurial enterprises throughout their lives. There is nothing better than making some side money. The thing people often misunderstand is that you don’t have to spend a ton of money to start a business. I started a personal finance blog as a hobby a few months back. I probably put $100 into it, although the time was substantial. Still, it was a hobby. I made some money off the site and then I sold it for a lot more than I paid for it. I have now started a “business” as a freelance personal finance blogger and I have purchased a few other website properties to develop over the next few months. I am not tech savvy, I was just interested. I am a lawyer in my day job and work hectic hours, but I still find the time. I have friends who have landscape businesses on the side or who sell scrap metal. The point is if you make an effort you can make money off of a hobby or a side job. At the same time, saving extra money for perhaps more daring future entrepreneurial attempts may prove to be a good investment as well.

Future Expense #5 – Yearly/Quarterly Expenses
Every four months my wife and I know we have to pay our property taxes. Every six months car insurance must be renewed. Every year we know the possibility exists that we will owe “Uncle Sam” some money. Those extra insurance expenses I discussed above have to be paid once a year as well. If you can save for this money you will pay less, as most companies charge you more if you pay per month. Having these relatively “short-term” future expenses covered will work in conjunction with your “emergency” fund to better ensure your financial security.

Final Word
It’s not easy to pay all your present financial responsibilities let alone to save for future expenses. That said, doing so can give you a peace of mind you may not otherwise have. If you have young children you very well may want to add college expenses to this list.

What other items would you add to this list? What future expenses do you save for? What future expenses do you find keep getting pushed aside?


  1. says

    You covered almost everything here. We also save for the kid’s education via the 529 account. We just had a baby so it just got started. I can’t imagine how much college will cost in 20 years. Hopefully we can cover some of it and then he can get some scholarship and loan to cover the rest.

    vacation fund? We usually just pay for that out of the emergency fund and rebuild it back later.

    • says

      To be sure, if you can afford it a Vacation fund is a great selection as well. We used to save quarters for our vacation fund. Over years it built up into hundreds of dollars and eventually nearly 2k — all in change. I should post about that sometime.

  2. says

    I certainly think about all of these expenses but I can’t say I specifically save for them. I generally just live cheap and put the rest into one big savings pot. Retirement savings are separate in tax-advantaged accounts though. My big savings goal has been my MBA recently though – I started a 529 account for myself.

Leave a Reply

Your email address will not be published. Required fields are marked *