Though Shakespeare didn't intend his famous words to be used in an article about personal finance, we're going to use them for our purposes. When we talk about a stage in the world of finances, we are generally talking about a life stage. Your financial needs are different at different phases of your life, and there are new things to consider as you enter a new one.
Starting a Career
You're young and smart and have a world of choices ahead of you. Financially, some of the biggest things you'll be looking at are:
- Learning to budget your starting salary
- Learning to save consistently (pay yourself first)
- Building your credit rating
- Borrowing for a new car
- Starting a retirement account (especially if your employer has a matching program)
- Student loan consolidation
There are a whole new set of financial issues to deal with when you get married. Blending your styles of managing money along with your savings and checking accounts can be daunting. Money disputes continue to be a leading cause of divorce. Before you get married, make sure you talk about some of these issues. Aside from coming to agreement on your spending/saving strategies, there are other needs to consider:
- Setting up joint accounts (all together or yours, mine and ours?)
- Changing insurance
- Buying your first home
- Paying down debt
Though it may seem like a long way off when your child is an infant, you need to start planning for their future right away. You'll need to make adjustments to your finances to meet all the new expenses.
- Saving for a child's college tuition
- Adjusting your budget allowing for the additional expense of children (day care or loss of one spouse's income, clothing, food, diapers, and the list goes on!)
- Do you need more space in your home - creating an addition or buying a larger home?
- Increasing insurance needs
- Estate planning and a will (what will happen to your child if both parents die unexpectedly?)
Once your children are grown and gone, you have to switch back to putting your own financial needs first once again.
- Should you downsize your home?
- Are you on track to have adequate retirement income from your savings?
- How much should you leave in the markets versus keeping more in insured savings?
- How close are you to paying off debt?