Yahoo Finance 3 Costly Milestones You Probably Can Afford in 2024 — and 3 You Cannot
Due to soaring inflation, life has become more expensive over the last few years, forcing many Americans to delay major financial purchases. Buying a home, buying a car, retiring, paying for a wedding, expanding the family or taking an expensive vacation are all significant milestones that require financial planning. Due to rising costs, these milestones have been placed on the back burner as people try to figure out how to navigate their finances.
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A GOBankingRates survey asked Americans what major financial milestones they’re planning for 2024 — here’s a look at which they should be able to afford in 2024 and which may still be too expensive.
Financial Milestones Americans Are Considering in 2024
The survey found that the most common costly milestone people hoped to achieve in 2024 was buying a car.
Here’s the breakdown of which cost milestones Americans were considering in 2024:
Buying a car: 38.31%
Other: 29.07%
Taking an expensive vacation: 25.31%
Buying a home: 24.16%
Expanding the family: 11.36%
Paying for a wedding: 8.08%
Retiring: 5.77%
Find Out: How Much Money Do Americans Have in Their Bank Accounts in 2024?
Highlights From the Survey
The same survey question in 2022 revealed that 40% wanted to purchase a car, while 24% wanted to buy a home.
46% of men surveyed planned on buying a car, with only 33% of women planning the same.
Men and women were tied when it came to buying a home, expanding the family and taking an expensive vacation.
Only 5% of women surveyed planned on retiring this year, with the figure reaching 7% for men.
34% of those between the ages of 25 to 34 planned on buying a home this year.
7% of those in the 65 and over range group plan on retiring in 2024.
4% of the people between 35 and 44 were planning on paying for a wedding in 2024, with 14% in the 25 to 34 range.
Three Costly Milestones You Can Probably Afford in 2024
GOBankingRates reached out to experts and looked through financial data to determine which costly milestones Americans can probably afford in 2024.
“Home and car purchases are expected to be the most affordable milestones for 2024,” said Todd Stearn, founder and CEO of The Money Manual.
Buying a Home
“According to Fannie Mae, mortgage rates are expected to drop this year, reaching the low 6% range during the buying season — spring to early fall,” Stearn said. “While this will likely lead to more demand and somewhat increased prices, Fannie Mae predicts overall increased housing affordability by about 5% this year.”
Interest rates expected to drop in 2024 could make becoming a homeowner more affordable. Many Americans have been on the sidelines regarding real estate, because housing prices went up, supply became limited and mortgage rates were through the roof. However, if rates and prices drop, then 2024 could be the year first-time homebuyers can make a move.
“The silver lining is that rate cuts are expected as early as this spring,” said Liam Hunt, director at GoldIRAGuide. “As mortgage rates decline, this could lead to improved affordability for buyers. Lower interest rates decrease the monthly payment on new mortgages, making it easier for buyers to afford homes. For example, on a $300,000 loan, a drop from a 7% to a 6% interest rate can reduce monthly payments by several hundred dollars, significantly affecting a buyer’s ability to afford a home.”
If someone has been diligently saving for a downpayment and managing their finances in hopes of entering the market, this could be the year they can finally afford this milestone.
Buying a Car
“According to a report from Cheddar.com, a dramatic increase in the availability of new cars and trucks will bring significant price drops this year,” said Stearn. “If you compare the 2.61 million new vehicles available this past January to the 1.74 million new vehicles on dealer lots last year, you can probably see why 2024 is expected to be the most affordable year to buy a new car or truck in the past five years.”
Soaring inflation was partially fuelled by the increased prices of vehicles nationwide due to production issues and supply chain struggles. With computer chips more available — and since the United Auto Workers returned to work after last year’s strike — more vehicles are available on lots.
According to data from Edmunds, the average price of a new car dropped 1.2% in January from the previous year, to $47,338. This number is down 2.4% from the high set at the peak of the shortage in December 2022.
If someone has been waiting to buy a new car, they may finally find the set of wheels that they’ve been hoping to purchase sitting on a lot.
Taking an Expensive Vacation
“There’s a lot of conflicting info right now about whether travel costs will increase, decrease or remain relatively flat in 2024, but few predictions indicate a dramatic swing in either direction,” said Stearn.
Taking an expensive vacation could be much cheaper than the other options on the list. For example, if someone realizes they can’t afford a wedding or to have children, they may opt to go on a big trip, instead. Depending on personal preferences, you can customize this expense to limit how much you spend.
Three Costly Milestones You Can Probably Can’t Afford in 2024
Conversely, there are costly milestones that may not be as affordable or realistic for Americans in 2024.
Starting a Family
“With the car market starting to slide and the housing market thawing, having a child — expanding the family — appears the most unaffordable milestone of 2024,” said Scott Lieberman, founder of Touchdown Money. “With companies trying to force remote workers back to the office, childcare expenses will only grow as two-income households decide whether to cut back to one income or pay for daily care.”
Childbirth costs are around $19,000 in 2024 when you factor in pregnancy, delivery and postpartum. Your health insurance may cover most of this, but you would still be looking at spending $3,000.
“According to the U.S. BLS Consumer Price Index, the cost of infant care items has increased considerably over the past year, with baby formula coming in a whopping 8.7% higher this past January than last,” noted Stearn.
Lieberman elaborated, “New baby expenses remain very expensive, as manufacturers know parents have few options to shop around and will usually stick with one brand once their little one expresses a preference for it.”
When you consider all of these expenses, the idea of starting a family may seem like an expensive milestone that may have to be delayed until 2025.
Weddings
“A report from wedding website Zola says that the cost of weddings is expected to hit $33,000 this year, a $4,000 increase from just last year,” Stearn said.
With the price of weddings going up, this is a milestone that you may want to consider putting off another year. Those who have thought about throwing a lavish wedding may opt to put the funds towards a downpayment for a house or a dream vacation, instead.
Retiring
This is an expensive milestone that many people won’t be able to afford in 2024 due to the increased cost of living. While retiring is a personal decision, many Americans will likely look at the increased prices of all expenses and think twice about retiring.
With so few of the survey participants listing retirement as a milestone that they hoped to accomplish in 2024 — just 6% in the 55-64 age group — it’s clear that those close to retirement age may be considering working and saving up for a few more years to ensure a comfortable lifestyle in their golden years.
Closing Thoughts
After numerous delays, certain expensive milestones could finally become affordable in 2024. Unfortunately, some milestones may have to be put off another year.
As always, it’s important to conduct your due diligence and focus on saving money as you decide how to proceed. If you have the funds to achieve one of these major financial milestones, then you’ll want to ensure that you make the best decision possible for your situation.
Methodology: GOBankingRates surveyed 1,039 Americans aged 18 and older from across the country between Nov. 9 and Nov. 13, 2023, asking ten different questions: (1) How would you rate your financial well-being/situation at the end of 2023?; (2) How much do you want to realistically save in the next year?; (3) What types of investments are you considering for 2024? (Select all that apply); (4) Will you be in debt in 2024?; (5) Will you have an emergency fund going into 2024 and how many months will/would it cover?; (6) Which best describes your top financial goal for 2024?; (7) Are you planning for any of these major milestones in 2024? (select all that apply); (8) What is your top financial stressor heading into the new year?; (9) Are you planning for any major job changes in 2024?; and (10) What would you like to have happen the most in 2024?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: 3 Costly Milestones You Probably Can Afford in 2024 — and 3 You Cannot
