Major life events can be happy, joyful, stressful, sad and many things in between. The one thing they have in common is that as each new event happens, it marks a new chapter in your life. Whether it’s a marriage, a birth, a death, a retirement, or a graduation - all of these events provide an opportunity to re-evaluate your current financial situation. The more you’re proactive in your addressing these important events, the better off your bank account and your peace of mind will be.
Since many people are waiting until later in life to get married, combining finances has become harder than it used to be. It’s important to have very open communication during this pre-marriage process. What is the best way to combine your finances? How do you work through one partner’s debt issues? How will big purchases be made in the future? Are both of you financially responsible? What are your emotional ties to money? All of these questions should be answered prior to tying the knot.
Getting a Raise
There is nothing better than getting that raise you worked so hard for. But, just because you get a raise doesn’t mean you should increase your spending. Having that extra money puts you in a better position to save for emergencies, education and retirement. Since the typical personal saving rate in the United States is 5.7% a year, take this opportunity to increase the amount of money you are saving to get to closer to the more appropriate goal of 15%. When you are saving at least 15% of your money, you put yourself in a better position to handle technological change, planned obsolescence, tax law changes and inflation.
Having a Child
The joys of having children are endless, but they are very costly. Make sure you’re considering all of your options when it comes to planning for their future. And that includes protecting yourself. If you do not already have life insurance, having a child is definitely a good time to consider the impact of not having adequate protection. With proper insurance protection, you can secure your child’s future even if you aren’t around.
Buying a Home
Buying a home is a huge life event and a big financial decision. Whether you are buying your first home or moving, make sure you do your research. How is your credit score? What can you afford? Do you have enough for the downpayment and closing costs? Are you buying the right mortgage? Can you afford unforeseen costs such as a roof repair or replacing the AC? Be sure you are fully prepared for the financial responsibilities of owning a home.
Retirement is what you’ve worked your whole life to enjoy, so make sure you can enjoy it! Work with your financial professional to make sure you are properly budgeted to enjoy your golden years. Ideally, you’ve been planning for retirement since you were in your 20’s to make sure you’ve saved enough along the way. Check out this blog on what you can expect when it comes to retiring.
With all of these major life events, it’s so important that you are always checking in with your financial professional along the way. Yearly check-ins are the best way to make sure you are owning your financial journey and that you are set up for success. Talk to your Leap Professional on how you can make this process sane, sound and simple.