Financial Literacy
Money Matters
Important Life Events
What are my finacial goals and how can I achieve them?
One way to reach your financial goals is to plan for them - the expected and the unexpected.
To help you plan for the future, here is a list of some important life events that you should keep in mind. Each pose a different kind of challenge, financially, physically and mentally. By thinking about these events ahead of time, you can be more prepared and able to over come the obstacles that each event poses in your life.
These events may not apply to all, but a little extra knowledge never hurts!
Saving Up For College
The cost of college is rising by the year, while acceptance rates are reaching an all time low.
Other than preparing to get into college, you should also start saving up to pay for college. The average annual cost of community college is 7,000 dollars, and 35,000 dollars for a private university. Starting to save up early and investing in stocks or bonds are two good options.
Many colleges and universities offer financial aid and student loans, but be careful, you do not want to end up with a huge debt coming out of college.
Apartment Or House
Renting Or Buying
Not everything is right for everyone. The question is long term or short term commitment.
There are so many questions to ask before deciding whether to go for a house or an apartment, or whether to rent or to buy. For starters, renting apartments are a great short term commitment, but do not have any investment potential, whereas buying a house is better for a long term commitment, and can result in a great investment.
Before making the big decision, check your situation, not only financailly, but socially. Ask what are your needs and the needs of people around you such as your partner or your family. Are you ready to take care of maintance and repair issues yourself, and pay those huge utilities bills and taxes, or will you be able to negotiate with your landowner for a better lease and keep up with your monthly payments? Try calculating possible costs for both situations, and then decide whether you actually need that extra bathroom or closet.
Divorce
Fifty percent of all couples in America end up divorcing. This is a very sad but very real statistic.
Divorces are emotionally stressfull times, so they are rarely ever simple. Knowing what to do can definitely help you when the time comes. The first thing you have to decide is whether you need an attorney or not. If both you and your partner can agree exactly on what to split, then by filing the correct papers and appearing in court to explain why you are getting a divorce is enough. But there are usually disagreements when it comes to spliting assets.
Although attorneys are expensive, they are useful when it comes to making tough decisions. Finding a good attorney who will keep your best interest in mind is very important. It is a good idea to have a different attorney than your partner. Make sure to do thorough research beforing hiring an attorney!
Retirement
Today, retirment is being put off longer than ever because of life's growing demands.
As the healthy life span increases, the challenge of retirement becomes more and more difficult. There is no longer a set age for retirement. In fact many people cannot afford retire because they do not have enough money to fullfill their needs. Long term planning is key in retirement. Sit down and set a goal for when you want to retire, how much money you will need to retire, and how will you save up that money.
Investing in stocks, properties, or selecting a retirement plan early on can help you prepare for the future you want. Options to consider when saving for retirement include: Individual Retirement Accounts (IRA), 401(k) Plans, and Annuities.
Buying A Car
A car can be more expensive than you think - a down payment, monthly installments, gas, maintenance, insurance ....
Many people do not look at buying a car as an important life event, but without the right preparation and research, buying a car can create a huge hole in your budget. Plan ahead and do your research: which car suits your needs best, which can you really afford, do you need to take out a loan, can you afford the maintenance and operating expenses?
Another important thing to remember is that the minute you drive your car out of the dealership, it loses almost 15% of its value.
Marriage
Weddings are fun, if you aren't the one paying for them.
Getting married is much more challenging, finacially speaking, than it seem. Aside from the fact that all your financial troubles now become your partners, and vice versa, planning the wedding is usually the most stressfull part.
A great idea is to sit down with both families and start by discussing a budget for the wedding, and then follow it. Planning a great affordable wedding is possible, if you put in the time and effort.
After the wedding, you have other things to worry about such as working out financial goals and limits. Discussing finances with your partner may be hard, but it is very necessary to keep a working relationship.
Parenting
Babies cry all night, they keep you on your toes, they won't eat, they won't sleep, but they are so cute! Just wait till they grow up...
Raising children is actually very expensive. The average family will spend around 250,000 dollars on raising a child until 18, college not included. The birth of a child itself is very expensive, with hospital bills, unpaid maternity/paternity leaves, and other first time investments. It is a good idea to start financially preparing early if you are planning on having a child. Think about having a savings account for your child, and preparing everything ahead of time. Talk to other experienced parents about things to do before the baby comes.
As your child grows, so do your expenses: sending your child to a good school - private or public - camps, classes, tutors, extra-curricular activities, college touring... Also, raising your child will take up most of your time so prepare to be flexible.
Elderly Care
Caring for elderly can be hard, but making the decision between professional or home care is harder.
For elders who can no longer take care of themeseleves, home care by the family is a common option while nursing homes are easier but more expensive. Either decision is equally challenging and still costly. With prescription drugs, doctor check ups, taxes and fees, along with insurance and health care problems, caring for the elderly can pose a number of financial and legal issues.
For those in more severe or late stages of their life, a living will, letter of instruction, will, and power of attorney may be necessary. Funeral costs should also be considered.
Some other important life events to think about are the unexpected ones, such as an accident or injury, death in the family, unemployment and various legal issues. Of course no one can be completely prepared for the roller coaster of life, but we can take steps to educate ourselves so we can do the best we can when the time comes to handle that situation.