6 Major Life Events To Be Financially Prepared For

“Failing to plan is planning to fail,” says Benjamin Franklin. This statement truly makes sense when it comes to financial planning. Major life events, if not planned, can significantly impact your financial health. Whether you hear your wedding chimes jingling, whether you are purchasing a house, or preparing to retire, you must set certain benchmarks to evaluate your monetary objectives. Make sure to discuss them with your financial consultant to ensure that you are financially prepared.

We suggest planning for the major events of your life as soon as possible, as little changes made early can have a huge financial impact in the long run.

Below are some of the most important life events that you should be financially prepared for.

1. Getting Married

Weddings are cheerful occasions, but they come with a cost. Weddings are often extravagant and opulent, with numerous visitors and eloquent functions. Wedding costs can rapidly deplete your funds, leaving you with almost nothing to put together for your new life ahead. If marriage is at the forefront of your thoughts, make sure that you make proficient decisions for yourself as well as your future partner.

Devise a monthly budget plan and follow it. Set up a joint statement of income and devote a particular timeframe for reviewing it from time to time. Conclude which of your accounts and costs would be different and which ones would be together. Also, decide on the types of health insurance, life insurance, and other insurance policies you’d take up with your significant other. Apart from this, make an investment plan based on a diverse set of assets to reduce risk.

2. Purchasing a Home

Home is probably the single largest investment we tend to make. Your primary move in this process should be to actually look at your income as well as your expenses. If everything seems perfect, i.e. you can afford the initial investment and monthly EMIs, you’re good to go.

Evaluate home loan interest from several banks and financial institutions to gauge your principal along with the installment rates. Learn about the different real-estate tax structures and select the one that suits you. Another wave that has been soaring recently is home insurance, so see if you are willing to go for it. You’ll likely need to make some changes in your lifestyle to avail yourself of home credit.

3. Starting A Business

If starting a business or a new venture is one of the things you wish to pursue, then apt planning is a must for the same. Every business, no matter how small or big, requires a certain amount of money.

At the point when you’re prepared to set up your new business, you and your lawyer will first have to decide on the right business structure: Sole Proprietorship, Limited Liability Company, General Partnership, or the equivalent thereof. Also, you need to keep your personal and business accounts separate while considering the development of trusts. This would almost assuredly safeguard your personal assets from business perils.

In addition, you also have to decide on an exit strategy, i.e. selling it to a larger company, taking it public, or the one that is suitable for your business. If yours is a family business, you’ll need a roadmap for passing the business to the next generation, probably financed through trusts.

4. Child Planning

Childcare is indeed costly these days, right from the birth of your child to raise them. In addition, this is almost an investment of a lifetime and you must give it ponderous thought considering the major events in the child’s life. Some of these key events include schooling, college, healthcare, day-to-day needs, marriage, etc.

These events may sound thrilling, but you should seriously consider planning for your child’s future in advance. Plan your child’s education goals ahead of time and examine a few education-saving plans. Assess the education-saving funds and leverage employer advantages that can help you, like day-care compensation. Also, don’t forget to include your child in the medical coverage, life insurance, and other policies.

5. Retirement

Retirement is a conundrum for the vast majority of people, mainly for two reasons: a ton of void time and abrupt evaporation of income. But it doesn’t have to be a conundrum if you invest in a consistent income stream that permits you to carry on with a similar lifestyle. Make investments into a good retirement plan and clearly anticipate the monetary value you’ll be receiving when you’re on the cusp of your retirement. Nowadays, there are several retirement plans that you can opt for.

Financial abundance is one of the key necessities for physical and mental well-being. Stress over finances is the last thing you want. As a rule of thumb, it is recommended to hold about three to six months of daily costs as reserves for any uncertain situations.

6. Unprecedented Events

There are events that arise out of the blue that leave us flabbergasted. A lack of financial preparation for the same can make the situation worse and deteriorate your confidence. The most effective way to deal with these occasions is to plan for such events and accept that they’re going to occur at some point. Develop an emergency fund to pay for a surprising hospital expense or a house fix.

You can get life insurance, home insurance, vehicle insurance, and other insurance as well. Medical coverage decreases the amount of cash you pay out of your pockets when such a scenario emerges. Auto and home protection balance the expense of an accident, fire, or harm from a catastrophic event like an earthquake. Life insurance shields your family members and relatives in case of an unexpected demise.

While you can’t positively anticipate everything, it is good to have an emergency fund set up when things turn bad. Remember that once you experience an unexpected cost, you may have to re-evaluate your present plan and make the required changes.

In a nutshell, it’s advisable to have proper planning for all the major events in your life that are going to affect your finances. Money is important and should be handled properly. If you have planned for all the events listed below, we would like to congratulate you! You’re probably ready for these events, at least financially. But if you haven’t planned for these events, you should definitely consider blocking some time to ponder on these things.

Share this blog with someone you think needs to rethink the events of his or her life to plan it financially.