It’s impossible to predict everything in life, which is why it’s vital to have a plan both for those major events that are part of many people’s lives and for unexpected events tha...
Preparing for the financial milestones in your life
It’s impossible to predict everything in life, which is why it’s vital to have a plan both for those major events that are part of many people’s lives and for unexpected events that can have a big financial impact. Effective planning can help you prepare for the expected as well as the unexpected.
Marriage brings together not only hearts, but also finances, so it’s wise to discuss how individual finances and assets and debts should be arranged in order to promote financial harmony after the honeymoon is over. Integrating finances includes deciding what finances will be shared and which will be separate. Combining tax returns can potentially save a couple more than a thousand dollars per year.
Expecting? Then, expect alterations in the family budget. Whether it’s the everyday expenses like formula and diaper cream, or soccer equipment and prom dresses later on, children represent a large piece of the family budget pie chart, so it’s wise to ensure that funds are reserved for such a big life change. Even if you’re not expecting yet, it’s a good idea to set aside funds in the meantime.
Buying a home is one of the biggest investments a financial consumer will make. Planning ahead by saving for a down payment and building a good credit history are both important. Credit history is a crucial part of the home-buying process as a good credit background can help you secure an ideal mortgage rate. Additionally, estimating a monthly house payment ahead of time using a mortgage calculator makes it easier to incorporate this monthly payment into a budget.
Whether you’re an adult continuing your education or a parent looking ahead toward college education for a child, a 529 Plan or Coverdell plan should be considered. 529 and Coverdell plans are savings plans that include tax-free earnings growth for invested funds as well as the tax-free withdrawal for invested funds if they are applied to qualifying educational expenses.
An unforeseen employment termination is a financial hiccup no one wants to think about, but neglecting the possibility of job loss could result in financial headaches and worse if you don’t have an emergency fund to bridge the financial gap between paychecks. Build an emergency fund by saving a portion of every paycheck. An emergency fund should ideally consist of three to six months’ worth of expenses. Maintaining a current résumé and keeping in touch with professional contacts are also effective strategies for preparing for a potential job loss.
Retirement is the time to enjoy the fruits of years of labor, so it’s particularly important to plan a financial strategy for this time in life. Tools like retirement calculators, which can be found online, can help calculate expenses and income during retirement years. Long before retirement approaches, younger workers should contribute to tax-advantaged retirement plans, whether through an employer or a personal financial adviser.
Life’s major milestones should not center solely on finances, of course. The memories of the joy of getting married or seeing a baby’s first smile are priceless, after all. On the other hand, not making adequate financial preparations can result in money problems that can take away the pleasure that comes with many of life’s major events.
This content was provided by National Restaurant Association partner Discover.
Disclaimer: The articles and information provided herein are for general informational purposes only and are not intended to address specific issues or problems you may have, for which you may need to obtain professional advice. The trademarks mentioned herein are the property of the respective companies to which they relate.