Mastering Your Big Girl Budget (Part 2: The Long Term Budget)

The long-term is made up of a series of short-terms. It takes short-term successes, repeated, to create that long-term final “success” that we see in the distance. Last month, we went suuuuuuuper deep into the short-term, with this hella huge guide to short-term budgeting with my friends at Allstate. This month, we’re back at it again with budgeting – but we’re thinking longer (+ bigger).

Here, we’re assuming that we’re already *solid* on the short-term – so if ya need a refresher, do that before diving into this humdinger. Because really, we’re building off of everything we already know – like algebra or something. 😉 Things like actually *knowing* your personal finances + differentiating between wants/needs are all just as important + essential in the long-term as they are in the short-term. Heck, maybe even MORE so!

Because now, we need discipline.

Now, it’s not enough to just skate by with our monthly envelope budgeting (tho it’s still a hella good start, so keep at it!) – we’ve gotta have the long-term in our minds constantly, knowing that each decision today affects tomorrow.

SO. There’s a slue of resources included below, and you’re gonna want a cuppa joe + notebook to accompany today’s post – it’s jampacked with goodness, yo!

Mastering your Big Girl Budget (Part 2: The Long Term Budget) - Budgeting Tips + Tricks for creating your best life in the long term!

Figure out some long-term goals.

This is the biggest doozy of the bunch, so we’re just knockin’ it out straight away. MK? MK. Let’s break down a buncha different long-term goal options to consider (you can have more or less – no right answer here, peeps!).

1.) Family 

Family first! Whenever J + I are talking long-term goals, we’re talking family. It makes sense – everything you do in the long-term likely involves other people – ie., your family slash those closest to you in life – since none of us want to be flying solo through life without any of our peeps being in it for the long haul! Some starting off points for long-term family planning might be:

  • Vacations
  • Investments (which we’ll talk more about in a hot sec…)
  • Bigger purchases (A house, but also new vehicles, property/land, appliances, etc.!)

And then of course…

  • The family growing! If you want KIDS, that’s a huuuuuuge long-term line item on the family budget. 😉 And with that comes even MORE long-term planning, like saving for college and your own eventual retirement.

This is obvi something you can/should flesh out solo, but it’s also def something you’ll want to work out as a team with your future partner whom you wanna start a family WITH!

 

2.) Where to call Home

A clear biggy here – even if you currently call a shoebox in Manhattan “home,” chances are, you won’t be there forever. At SOME point, you very well might wanna do that thing everyone calls “settling down.” Which very well might involve moving…and more people. Whether you’re in an apartment, condo, townhome or house, some things to consider are the same ol’ same ol’ across the board: How much should you have in savings first? What are up front moving costs? How about ongoing living expenses? What are the local/school taxes?

Beyond that, it might start to differ. I’m breaking it down to “renting” versus “owning” instead of “apartment” versus “house,” since you can own an apartment and rent a house – ha!

  • Renting
    • Monthly rent? 
    • First and last month due up front?
  • Owning
    • Monthly mortgage?
    • HRA costs?

If you’re on the fence of renting versus owning right now, Allstate has this suuuuuper helpful calculator that might help put things in perspective for your own personal situation – you can use it here!

 

3.) Investments

Some people just have a KNACK for investing. They know how to just look at the stock market, and how to interpret it and make these spur-of-the-moment decisions that turn into millions down the line.

And I’m just here trying to turn my Chick-fil-A waffle fries today into a six-pack by next summer. HA.

Really tho, investing is obvi a KEY when it comes to long-term budgeting, since it really has the ability to totally transform your entire life. Remember in this post how we broke down how much more money you can end up with (*cough* hundred of thousands, if not millions) down the road if you invest more now versus later?

Allstate has a ton of SUPER helpful resources here, especially when it comes to mutual funds; long story short, a mutual fund is a company that pools $$$ from many different investors, investing it into stocks, bonds, and/or other securities. Investors can purchase “shares” of this portfolio of investments, and folks gain or lose income as investments perform well (or don’t). Fun fact from Statista: There’s more than $15 trillion invested in 9,000 different funds in the US. You’ve got stock funds, bond funds, balanced funds…#AllTheFunds. And then these funds can be used for everything from expanding your home, to funding retirement – especially since many can’t actually be touched/withdrawn from until a certain amount of time has passed. Speaking of retirement…

 

4.) Retirement

IRA? 401(k)? Everything and its mother has an intimidating acronym nowadays. 😉

The best thing about long-term planning your retirement is the ability to start small NOW for big impact when it counts (ie, when you’re 62+ and planning that tropical escape…). Allstate has SO MANY HELPFUL RESOURCES for retirement planning, from calculators to personal finance representatives.

This calculator will ask you only 5 questions and tell you exactly how much to put away every single month STARTING NOW so that you hit your goal and retire on your terms, however many years down the line that may be. (Sometimes it helps to just see options, too, to see the difference that even one year can make in terms of investing!) If you’re looking to max OUT your investments, this calculator will help show exactly how much you CAN put in, depending on what kinda investment plan you’re workin’ with.

 

5.) Life insurance 

If you’re like me and felt prettttty clueless when it comes to life insurnace beyond “you need it if you die” (morbid, I know), Allstate explains it all out here.

It’s one of those things we don’t think about (like, at all) until it’s too late. And it sounds totally morbid, so it’s not exactly everyone’s choice of coffee chitchat – but it’s worthwhile, especially when considering your long-term budgeting process.

Aiiiiiiiight now that we’ve figured out some long-term goals, we can move onto…

 

Pick a solid system that does math for you.

Some apps like Mint are great for managing your money – something that tracks your inflow + outflow and can give helpful tips/tricks along the way to keep you on track.

Alternatively, some banks do this! If you can, set up reminders for when to invest, or set up investments on autopay. That way, it becomes as second nature to budget for the long-term as it does to pay your phone bill in the short term! 😉

 

Sync up applications.

Mint AND banks have their own apps that you can sync across devices and with each other. If apps exist to make life easier – let them! If things are synced up, it lessens your work while providing an extra set of recommendations, almost like having an advisor on hand. This works to *protect* you, too, so that you’re always in-the-know of yo’ own money (important) and aware of what’s working with what in the outside world to come together and affect your finances now + in the future.

 

Always double check, re-evaluate, + pivot as need be.

That being said, don’t RELY on apps. Even with passive management investments, you’re going to want to check in from time to time, see what’s happening, and just familiarize yourself overall with your money. I mean, it’s YOUR MONEY.

Beyond checking in there, also check in on your *goals*.

Have they changed?

Are any new ones on the horizon?

The long-term is LIFE, so always be the first to check in on your own, see what’s up, and edit accordingly.

 

Have you started long-term budgeting as of yet? If so, what’s your current process like, and will it be changing at all now?

If you’ve got a favorite tool and/or resource that you use personally to prep for le future, let a sistah know!

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*This post was written as part of the Allstate Influencer Program and sponsored by Allstate. As always, all thoughts and opinions presented are entirely my own. As the nation’s largest publicly held personal lines insurer, Allstate is dedicated not only to protecting what matters most–but to guiding people to live the Good Life, every day. Thank you for supporting the brands that support Coming Up Roses.

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