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Uploaded:2015-11-17
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Chelsea and Lauren talk about some of the expenses of adulthood that you may not even realize you need to be thinking about, and how to budget for each.

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https://www.healthcare.gov/choose-a-plan/comparing-plans/

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Chelsea: Hi, I'm Chelsea

Lauren: And I'm Lauren and we are

Together: The Financial Diet!

Chelsea: And today we are going to be talking about the expenses of adulthood that we personally never though about, but are super important to prepare for.

Lauren: And we're passing on this invaluable knowledge onto you so that you have a little bit better idea as to what to expect. First off the cost of cleaning products is real. Everything from like the sponges to the dish soap to wood and glass cleaner to disinfectant to laundry detergent to dryer sheets, everything like that really adds up. It's a lot and it can easily cost you like $50 or more at the grocery store. 

Chelsea: And then you have more purely financial things like your health insurance and your emergency fund. Now for your emergency fund that means that you basically get to do nothing else in terms of funds spending until you have at least 3 months at the bare minimum of expenses in your savings account so you can pay if something happens, if you lose your job, you get injured, if anything happens you can cover it and something always happens. So then you have health insurance, which if you're working for yourself or part time means it's going to come out of your pocket every month yourself and that's something that you have to put aside and account for every month. Or if you're working for an employer that provides health insurance packages that means that money is going to be taken out of your pay check before it even hits your account, so you'll never get to see that money so don't get used to expecting it on you're pay check. And if your employer is one of the ones that offers health insurance packages usually you're going to have to choose between a couple of different options to decide the amount of coverage you want to get. Now usually you pay more up front and that means you get more things covered, if you're like me and my first year you're going to go for the absolute cheapest

Lauren: Bare bones

Chelsea: Crappiest program you possibly can and end up spending way more in the long run, in my case out of pocket. So what you really need to do is look at your average yearly medical expenses. Do you get sick often? Do you have to go to the lady doctor? Do you have glasses? All that stuff and really account that in to how much you should be paying per month. And we'll provide links in the description to help you decide which package is right for you.

Lauren: Now another unexpected cost of adulthood is repairing and replacing the items that you accidentally break. Now I know this is terrible sounding to say, but when you're younger you are surrounded by a lot of things that are not owned by you mostly, they are owned by your parents. So if you break something, chances are your parents are not going to make you replace it. But the older that you get, say you are throwing a dinner party in your own apartment and smash a set of 8 wine glasses- which I have done it before! 

Chelsea: You smashed 8 in one go? 

Lauren: Yeah, the whole sink just kind've shattered... And some ways to combat these costs are to invest, first of all, in not expensive stemware, glassware, drinkware etc. That's a huge plus. Also investing in a basic tool kit to fix things that might break around the house and finally invest in stain removal for things like towels, linens, napkins, stuff like that so you don't find yourself replacing them that often. 

Chelsea: Now another things you probably definitely not thinking of is weddings and by weddings I mean other people's weddings. Now I say this with love because I love the people who's weddings I'm going to, but that doesn't make it any less expensive. I'll be out about $2,000 this year from travel, accommodations, gifts, engagement parties, bachelorette parties, it adds up fast and that's not even including your own eventual wedding, which at this point might be happening in a dumpster if you have to go to too many weddings beforehand. 

Lauren: Another expense of adulthood is saving for retired you, so that kind of seems like almost the ultimate mark of adulthood and that's about 5% of each pay check that goes immediately into your 401k.

Chelsea: If you have a 401k, I never had one in my life, but you know, if I did I would have had to prepare for that 5%. And speaking of work stuff, depending on where your job is you might need what we call a professional wardrobe. Which basically means things like really nice investment shoes, one good suit at least, some nice tailored shirts, a skirt that ends around your knee, a bag to carry your laptop and all the stuff. Basically you can expect to pay close to a whole pay check and tailor before you can start your job. 

Lauren: Another expense is investing in products for your skin and your health that are more heavy duty. 

Chelsea: If you're lucky you might even find yourself in that awesome age bracket where you're fighting both acne and wrinkles!

Lauren: Now while these aren't considered essentials it's worth noting that during your mid and late twenties you'll have to invest in nicer products because that old, bright orange Clean and Clear bottle is just not going to cut it anymore!

Chelsea: Now the holidays are probably the biggest expense in terms of like pure, unexpectedness because you're so used to living in them as the kid who just receives gifts and eats candy and you know, if you make someone a macaroni necklace, everyone's so proud of you and it doesn't cost anything. Now you have to actually pay for real gifts for everyone plus travel plus often hosting it at your own place, which makes it go from just a fun party time to huge expense that you have to plan 4 months in ahead plus some party time. 

Lauren: Now all this sounds expensive and let's be honest, it is, but affording it is not hopeless. Now we've both found ways to combat this and the first step is creating a clear, strict budget for yourself. I use Excel and Chelsea uses an app called Mint. 

Chelsea: Now on top of that we recommend seeing if you can add about 15% of your take home income through side jobs and one off gigs. Now for example, if you're earning about $2,500 a month that means that you want to look to add $375 to your monthly income, which might sound like a lot, but it really breaks down to like 3 nights of babysitting and maybe a catering job. This 15% is huge in terms of helping you offset the costs we've talked about as well as saving for big future things. For me personally, when I started writing to help supplement my income because it wasn't that good I took on tutoring gigs in French and English that I found through Craigslist, a site called WyzAnt, and even meetup.com and it was huge for helping me earn money. 

Lauren: No matter how you do it, it is possible to increase your earning potential with a little side hustling that will make all of these expenses a lot less painful.

Chelsea: Being an adult is expensive, but it's not impossible.

Lauren: So thanks for watching and don't forget to hit the subscribe button and go to thefinancialdiet.com for more

Together: Bye!