Five Times in Your Life When You Might Need Help with Your Finances

September 18, 2019

As you move through different stages of life,
you will face new and unique financial
situations. Did you just get engaged? Perhaps
you are wondering how you and your partner
are going to manage your money together. Do
you have children? Maybe you are looking for
ways to pay for their college education.
When you navigate through these various life
events, you might seek professional guidance
to help you make sound financial choices.

1. Getting married
Getting married is an exciting time in one’s life,
but it also brings about many challenges. One
challenge that you and your spouse will face is
how to merge your finances. Careful planning
and communication are important, since the
financial decisions you make now can have a
lasting impact on your future.
You’ll want to discuss your financial goals and
determine which are most important to both of
you. You should also prepare a budget to make
sure you are spending less than you earn.
Other issues to consider as a couple include
combining financial accounts, integrating
insurance coverage, and increasing retirement
plan contributions.

2. Buying a home
Buying a home can be stressful, especially for
first-time homebuyers. Since most people
finance their home purchases, buying a house
usually means getting a mortgage. As a result,
you’ll need to determine how large a mortgage
you can afford by taking into account your
gross monthly income, housing expenses, and
long-term debt.
And if you haven’t already done so, you’ll need
to save for a down payment. Traditionally,
lenders have required a 20% down payment on
the purchase of a home, however many lenders
now offer loans with lower down payments.

3. Starting a family
Starting a family is an important — and
expensive — commitment. As your family grows,
you will likely need to reassess and make
changes to your budget. Many of your living
expenses will increase (e.g., grocery,
health-care, and housing costs). In addition,
you’ll need to account for new expenses such
as child care and building a college fund.
Having a family also means you should review
your insurance coverage needs. Life insurance
can help protect your family from financial
uncertainty if you die, while disability insurance
will help replace your income if you become
injured or sick.

4. Paying for college
Paying for college is a major financial
undertaking and usually involves a combination
of strategies to help cover costs — savings,
financial aid, income during the college years,
and potentially other creative cost-cutting
measures. Hopefully, you’ve been saving
money on a regular basis to amass a healthy
sum when your child is ready for college. But as
college costs continue to rise each year, what
you’ve saved may not be enough.
For this reason, many families supplement their
savings at college time with federal or college
financial aid. Federal aid can include student
and parent loans (need-based and
non-need-based), grants and work-study (both
need-based), while college aid consists
primarily of grants and scholarships
(need-based and merit-based). In fact, college
grants and scholarships can make up a
significant portion of the college funding puzzle,
so exploring the availability of college aid is
probably the single biggest thing you can do
after saving regularly to optimize your bottom
line. In addition to financial aid, you might take
out a private college loan or borrow against
your home equity. Or you might pay college
expenses using your current income or other
savings or investments.

5. Saving for retirement
You know that saving for retirement is
important. However, sometimes it’s easy to
delay saving while you’re still young and
retirement seems too far off in the future.
Proper planning is important, and the sooner
you get started, the easier it will be to meet
your retirement income needs. Depending on
your desired retirement lifestyle, experts
suggest that you may need 80% to 100% of
your pre-retirement income to maintain your
standard of living. However, this is only a
general guideline. To determine your specific
needs, you’ll need to estimate all your potential
sources of retirement income and retirement
expenses, taking taxes and inflation into
account.
Once you’ve estimated how much money you’ll
need for retirement, your next goal is to save
that amount. Employer-sponsored retirement
plans like 401(k)s and 403(b)s are powerful
savings tools because you can make pre-tax
contributions (reducing your current taxable
income), and any investment earnings grow tax
deferred until withdrawn, when they are taxed
as ordinary income. You may be able to
enhance your savings even more if your
employer matches contributions. IRAs also
offer tax-deferred growth of earnings

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