Section 2: Building Your Financial Foundation
Tip: Many financial experts caution against investing funds you'll need in the near future, since the market’s timing isn’t guaranteed. You don’t want to lose money if the markets are down when you need it. If you cannot resist the urge to spend that cash, one approach may be to keep the anticipated initial payment (or down payment) in a savings account while investing the remainder. For example, if you're saving for a house, consider this two-part strategy:
Keep your down payment in a high-yield savings account for quick and safe access.
Invest only the remainder of your cash if your risk tolerance allows.
This will allow you to have the initial payment readily available when needed. If the markets are up, you can withdraw the remaining amount as needed. However, if the markets are down, you can wait to withdraw the rest of the money until the markets recover. This can be more risky, especially for near-term future expenses, but it may keep you from spending this money.
*Remember, it’s essential to keep your initial or down payment in cash.
Education, vehicles, new home, weddings, etc.
Plan for potential near-future expenses and set aside the necessary funds.
Think education, a new vehicle, a wedding, a new home, a dream vacation, or something else on your horizon. If it’s coming up within the next three to five years, it’s time to plan now so future you isn’t caught off guard.
These expenses deserve a dedicated line in your financial plan. Start earmarking funds early so you can approach these milestones with peace of mind, rather than scrambling for solutions.
This mindset prepares you for what’s next, and it gives you the confidence to say yes to your future without hesitation.
*Check out the links below for more tips on these types of purchases:
College: https://www.lemmikkiwealth.com/college
Vehicles: https://www.lemmikkiwealth.com/cars
Home/Real Estate: https://www.lemmikkiwealth.com/house-and-real-estate
Use the worksheet below to track your Near-Term Future expenses goals. Attach it to your Annual Financial Checkup workbook for future reference.
Downloadable Worksheets
NEAR-FUTURE EXPENSES Worksheet
This worksheet is also included in the Annual Financial Checkup Section 2 bundle.
Section 2 Annual Financial Checkup bundle.
This bundle includes all the worksheets for Section 2, including the NEAR-TERM FUTURE EXPENSES worksheet, in a single, easy-to-use PDF download.