Planning is the New Procrastinating
Age has nothing to do with it. Your future is happening right now. So you might as well get ahead of it with smart financial planning – be it for retirement in thirty or forty years or parenthood in three to four years.
Fortunately, it’s never too early or late to embark on a financial plan of your own. With a little foresight, you’ll be able to bridge the gap between now and the future with baby steps instead of clumsy leaps and bounds.
- Step 1: Learn how to make marriage a perfect financial union
- Step 2: Know what you can really expect when you have children
- Step 3: Here’s what to do before you buy a house, new car or insurance
- Step 4: Educate yourself and plan a career for the 21st century
Before You Make That Major Purchase
Think long and hard about your financial goals. Then look again at that major something you’re about to buy, that very something you’ve been craving or needing or wanting to complete your wardrobe, your home: your life!
Now walk away. Log off. Get a hold of yourself! Differentiate between your wants, your needs and your whims, and if that thing is still whispering your name, take a cold shower.
Why? Because the world we live in is one of instant gratification, making it all too easy to part with cash, accumulate debt and fall short of our financial goals. That’s why it’s so important for you to:
- Set a threshold drawing a line between minor and major purchases (be it $100, $1,000 or $10,000)
- Do your homework and find the best deal
- Instead of whipping out your credit card or loan application, establish a savings timeline or look into layaway and other payment options
Build a Perfect (Financial) Union
Let’s not beat around the bush: marriage is a complex relationship on many levels, and it’s not a partnership to be entered into lightly. Committing your life to someone also has the potential to be the most rewarding partnership you’ll ever have, emotionally…and financially. That is, if both partners work together from the start to achieve their joint financial goals.
While finances might not be the sexiest conversation to have with your significant other, sharing your hopes and dreams for the future is.
That’s all money is: the catalyst to make that crazy, sexy future together a reality.
So before you tie the knot, disentangle yourself from the notion that money talk is taboo. Enlist a third-party if you have to—as in a financial advisor, like a CPA. And before you lift that veil, unveil your less-than-stellar money habits to your future spouse. After all, marriage is for better or worse, and richer or poorer—but let’s aim for the former. Here’s some advice for getting you through:
- The honeymoon phase: the financially smart way to plan a wedding
- Every day money matters: the real life way to combine your finances
- A future of possibilities: prepare for the best and plan your estate
Starting a Family
What to Really Expect When You Have Children
You’re starting a family? Congrats are in order! So is this a rude awakening? Parenthood is expensive. From childcare to college savings, the cost of raising kids – especially in this day and age – is huge. But it’s worth it! Those hugs, those kisses, those smiles… provide sweet satisfaction that you’ll never be able to bank or buy.
Le sigh…Now here are a few things you really can bank on:
Step 1. Clean up your credit report
Get a copy of your credit report and make sure it's accurate. If not, dispute incorrect information. Correcting en error can take time, so don’t wait until the last second to handle.
Step 2. Gather your own paperwork
Before you qualify for a mortgage, your potential lender is going to require a lot of information from you, including:
- You’ll have to completely reevaluate your financial situation, including goals, savings plans, insurance coverage and unexpected expenditures. Brace yourself (financially) ahead of time.
- Your life will become an open checkbook, but that doesn’t mean you can’t teach your kids how to manage money for themselves. You can, and you must.
- Right now, you’re focused on affording early childhood education. One day, your child might be majoring in early childhood education. You’d better start saving now for college.
Career Planning: 21st Century Style
Gone are the days of pensions, thirty-plus years of service and gold ‘retirement’ watches. For better or worse, this is the century of career mobility. But while this isn’t our (grand)parent’s job market, that doesn’t mean we should be cavalier about the niche we’re trying to carve out for ourselves—we can’t afford to be. Times are tough, more competitive and financially complex than ever before. Exciting, huh?
- Step 1: Do your homework to understand the steps involved in a career shift, including the immediate and long-term financial prospects of other career choices.
- Step 2: Prepare a budget and timeline for achieving your career goals, while continuing to get the most out of your benefits. This is also a good time to start or bolster your emergency fund to cover any gaps in employment.
- Step 3: Don’t sacrifice your retirement savings during the transition; instead supplement your income to make it through the short-term cash crunch.