Planning for Major Life Events: Financial Steps for Marriage, Parenthood, and More

Learn the Financial Steps You Can Take to Plan for Various Significant Life Events!

Graduating college and other events like marriage, buying a home, or parenthood can be huge milestones that people might experience in their lives. It is a pity that such a character-defining event will usually come at a high price. Marriage, college, and being a parent or a homeowner are all incredibly momentous parts of life, but it’s no secret that they are expensive. Even though you can get through tough times of transformation in your life, you can definitely sail through the stormy weather with a financial planning expert to help you out! Take a look at some examples of plans for major life events and the financial steps you can take to manage your finances:

The Milestone of Weddings and Marriage

Weddings are not cheap at all, especially if you dream about having a fabulous wedding at your ideal location. From venues to place settings, it all works out to be $30,000 on average! Before you propose to your significant other or say I do when they get down on one knee, you should have an idea of what you want your wedding to be like, so you can financially plan for it. Planning a wedding costs an arm and a leg and devours a lot of your time before you even exchange the vows, so the smart thing to do is draw a blueprint for your budget and start saving ASAP. You will have to generate a guest list, find a venue, catering, clothes, and so on. The average wedding has a flower budget of over 2 grand!

Cementing a milestone like marriage with the love of your life can be an awesome moment. Nevertheless, be sure that you have a talk with your partner regarding your financial situation and aspirations before tying the knot. Sit down with your partner and identify your financial goals. Furthermore, you need to find out how much your partner earns, if they are financially stable, and discuss some of the debts they may have, like medical bills or a title loan. While the preparation for this discussion may be very difficult, it would be worth verifying your partner’s finances before your marriage.

Along with common goals and financial planning, it’s smart to discuss shared expenses too. Budgeting as a couple primarily helps you to create joint savings goals, but it also allows you to cast an eye on each other’s spending at the end of the month. You can do this by opening a joint credit card that you both use for shared expenses and perhaps this is the start of your joint efforts to stay within your budget. Don’t hesitate to pay a visit to a financial planner today if you need help in budgeting your finances as a married couple.

Parenthood

Having kids can be a momentous occasion that will forever change your life. Not only can your children bring joy and happiness, but they can also deliver new financial responsibilities. In order to raise your kids, you must set a budget aside for healthcare, education, and anything they need. This includes groceries, toys, school supplies, and everything in between. Additionally, if you want your children to attend college, you can open a 529 plan to save money for future education costs. 

If you want your children to have security for life, you must update your health insurance and include them in your coverage. You can also write a will to name a guardian if you and your spouse pass away before your children reach adulthood. Make sure you follow your state’s requirements for creating and signing a testament.

Buying a Home

Homeownership can feel incredible after renting a place for so many years. However, there are some costs to consider before purchasing a house. First, you must save plenty of money to afford the down payment of a property. Second, you must find an affordable mortgage you can pay throughout the duration of your loan. Interest rates for homes have been fluctuating in recent years, so before you purchase a home, make sure that it makes sense to own vs. rent for your personal budget. 

It’s worth noting that down payments and mortgages aren’t the only costs to contemplate. Once you own a home, you can’t rely on a landlord to fix anything. You are responsible for maintaining your home, including hiring plumbers and electricians when something goes wrong! That includes paying for the necessary repairs when they come around. Even if you have a brand-new home, that doesn’t mean things won’t go wrong, and you will need to regularly maintain your home throughout the year. Landscaping, cleaning, and regular upkeep will all cost money. You need to pay for cleaning supplies, new flowers, and replacing items around the house as needed.

Graduating College

Another important life event is graduating college! For some people, this event comes after marriage and kids. But for others, finishing college comes before those other milestones. Regardless of what order you plan on going in, graduating from college should be celebrated. If you took out student loans and graduated with debt, you need to start planning on how you will pay that back. Depending on the amount of your loans and your type of payment plan, the amount you pay per month could be quite high. If you have federal loans and you qualify for the SAVE plan, your monthly loan amount will be generated based on factors like your gross monthly income and the size of your household, so it may be more affordable. In some cases, however, your payment could be higher through the SAVE plan, so it is important to look at all of your options and plan your budget accordingly. 

Prepare for Everything in Your Future

Whether or not you plan on meeting these important milestones in life, you should always prepare to be financially stable. The most important thing you can do in your adult life is set yourself up for success in the future, so when your retirement comes around, you have a large pool of money to fall back on.

Financially planning for the future includes setting up a 401(k) plan or equivalent, as well as creating an emergency fund and a separate budget for big milestones in your life. Many financial experts recommend setting aside around 10% of your income each month for your 401(k) or Roth IRA and you should have at least three month’s worth of expenses  in your emergency fund in case you lose your job or a financial crisis pops up. If you do not have a sufficient amount in your emergency fund and you need help, you may have to turn to a title loan or a personal loan to get back on your feet.

At the end of the day, financial emergencies happen, but you can be prepared for your financial future if you plan for everything and be responsible!