How life events can affect your financial planning strategy.
Have you ever thought about how major life events can affect your money? In these moments of excitement and anticipation, it’s also important to make sure your wallet is ready and prepared to help pay for the festivities.
Below, we have a few financial planning topics to keep in mind when celebrating some of life’s most exciting moments.
“You’ve been accepted!”
According to educationdata.org, “the average cost of college has more-than doubled in the 21st century, with an annual growth rate of 7.1%.” Not only do you have to worry about tuition, but expenses such as books and supplies can take a big hit to your wallet if you’re not prepared. With all these costs in mind, many students and their families seek financial aid assistance, whether that be through grants, scholarships, or government-backed student loans, each of which have their own pros and cons. Other options such as Clearview’s Student Choice loan solutions, can also help you fill in the money gaps.
“Congratulations, you’re getting married!”
Weddings are an expensive life event. Before you get enveloped in the excitement of planning your big day, it’s important to understand what your maximum budget is. From there, you can plan all the other aspects of your wedding such as venue, catering, etc. Let’s also not forget that weddings can be expensive for guests, too. Between the attire, travel costs, and gifts, each wedding you attend can add up to a pretty penny. As invites begin to flood your mailbox, be sure to prepare and budget for wedding season accordingly.
Also, if you haven’t already talked about financial planning with your partner, now’s the time to do so. Do you want to combine every dollar or keep some accounts separate? What’s important to you when it comes to financial planning and does it align with your partner? Having these discussions will help you and your partner be on the same page before saying “I do.”
“We’re expecting a little bundle of joy!”
Deciding to expand your family is one of the most expensive life events anyone can experience. From child care to nursery essentials to diaper costs, there are a lot of expenses to consider when budgeting for a baby. To help manage all the first-year costs, you can do some simple research to check for freebies, coupons, discounts, resale items, and hand-me-downs. If you decide to have a baby shower, creating a registry with some of your most needed items can help you offset having to pay for them yourself.
It’s also helpful to keep your health benefits in mind. Sure, having health insurance isn’t cheap, but it can certainly lower how much you pay out of pocket when you have a baby. The frequent doctor’s appointments throughout pregnancy can also be expensive if you don’t have insurance to counterbalance that cost.
“Welcome to your new home!”
Moving and buying a home inevitably raises many questions. Are you planning on buying or renting? Is it a good time to buy a home? Where do I want to live? Is this a short-term stay or long-term home? Your answer to these questions can have many financial planning impacts. For example, you may pay more upfront to buy a home than deciding to rent an apartment.
What about when you’ve decided to make the move? Your new home may have great curb appeal, but you may need help to curb the expenses associated with your move. On top of all the expenses included in buying and selling a house, it’s important to remember that you might have to pay for a moving truck and moving company, shipping your vehicle if you can’t drive it to your new home, potential furniture costs to furnish your new home, and closing costs.
“Best wishes on your retirement!”
So, what can you do to ensure you’re set up financially for your later years? Financial planning for your golden years will inevitably evolve throughout each stage of life. The strategies you implement when you’re younger may be more aggressive and risky, whereas when you’re older, you may look for strategies that are more secure and guaranteed.
Additionally, figuring out how much to save for your retirement is not a one size fits all answer. Striking a balance between saving enough for a comfortable retirement and not surrendering too much of your income during your working years can be difficult to achieve. Our Retirement Savings calculator helps you compare your planned savings to how much you may realistically need to retire.
These are just a few life events that will have an impact not only on you, but also on your money. Whether you decide to marry your sweetheart, make a cross country move, or get your college degree, these exciting moments will surely have an impact on your financial planning. With a little bit of strategic preparation, you can make sure these celebrations don’t break the bank.
