How do we budget for big expenses in our lives? I’m talking house money here folks; how do we go from $0 saved to $50,000 in cash for a down payment?
For most of us, a house or a college education are the most expensive things we’ll ever buy. And when you’re playing in the big money leagues, you need to use the big league budgeting strategies.

How to Budget For Big expenses
First, let’s just be clear: budgeting is awesome. Budgeting is the key to financial freedom, and it’s the tool you use to unlock financial awesomeness in all other areas of your life.
Because budgeting is simply giving every dollar you earn a job.
And in this case, you’re giving your dollars the job of saving themselves for a BIG purchase; a house, a future college degree, a new car.
Determine Your Timeline
How much time do you have to make money moves? Knowing this is the most important part of budgeting for big expenses.
If you’re saving and investing for your child’s college costs, you might have 18 years to work with.
If you want to be in your first home by the time you turn 32, you might have just a few years.
Also, if you have more than 5 years until you want to make this big purchase, you can invest some or all of the money in the stock market. Five years is enough of a timeline that you’re in the sweet spot; you can reap the benefits of market growth but you have enough time to recover from any market losses.
Less than five years and I wouldn’t invest any of my money. Instead, opt for a high yield savings account to tuck your cash away in.
Get clear on the timeline you’re working with. From there, we can crunch the numbers on how much to save or invest for your goal.
You can use our budget workbook to set a financial goal and timeline for yourself!
Allocate one stream of income to it
If you’re part of a two income household, or you’re someone with more than one stream of income, it’s time to dig into your numbers and reallocate some of that income flow.
Say you work a 9-5 and you do freelance design on the side. When trying to budget for big expenses, a great way to stay organized and see major growth is to allocate one entire stream of income towards the goal. In this case, it’d be your design money.
If you make $300 a month from that side hustle, it should all go towards your house fund.
If, on top of that, you can save $150 from your 9-5 job to the house fund as well, you’ve got $450 a month to put towards your goal!
Side hustles are dear to my heart, as having multiple streams of income was crucial to how I paid off all my student loan debt.
I think earning money from multiple places is one of the BEST ways to not only grow, but protect, your money in the long run. When you’ve got money coming in from multiple places you’re less reliant on any one job. Especially when you truly own your side hustle because you started your own business.
Separate the money into its own account
Keeping money separated is one of my favorite small money tricks that pays out hugely.
Humans are remarkable creatures in a lot of ways. And sometimes we’re just overgrown monkeys, especially when it comes to thinking long term.
If you’ve got your vacation fund in the same account as your down payment fund, it’s easy for your brain to just see one lump sum of cash and think “Oh, this trip to Mexico is about to be Kardashian levels.”
Keep your house fund separate from any other savings goals you’ve got by opening a new high yield savings account for it.
Allocate “Found” Money
To give your long term goals a boost, allocate money from things like tax refunds, holidays, birthdays, or bonuses to your savings. Saving for big expenses will go a lot quicker if you can tuck away a $1,500 tax refund and a $3,000 bonus away each year.
Take advantage of money tools
Sometimes we can’t simply save our way to success. Saving for big purchases may require some outside help.
Take advantage of the financial tools out there to reach your goals!
Or, if you have no debt and a very stable income, you could open a personal line of credit at a bank to act as some or all of your emergency fund and redirect all your cash to your goal.
While you’re saving that line of credit will act as your emergency fund. Once you’ve reached your goal you can then go back to saving cash for your emergency fund.
There are SO many tools out there that can help you grow your money faster! What tips do you have for us to budget for big expenses?
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