At various points in our lives, we will encounter milestones that can significantly alter our financial circumstances. From having children, buying homes and changing jobs to planning financially ahead for milestone events like these - it is crucial to be prepared when making these life-altering decisions!
By taking time to assess your long-term goals and speak to a financial planner, reviewing them regularly can ensure you're better prepared to face life's major changes.
1. Review Your Long-Term Goals
Attaining long-term goals may seem challenging, but making them a priority can make all the difference in attaining them. This could involve earning professional certifications, finishing an advanced degree program or earning a Ph.D.
Achievement of any meaningful goals takes time and careful planning. To ensure you stay on the right path to achieving them, it's critical to regularly evaluate any obstacles or potential stumbling blocks and devise a plan of attack.
Short-term goals can also be helpful, providing smaller milestones that move towards your overall objective. For example, if your larger aim is launching a product within two years, perhaps setting an intermediate short-term goal of testing out a prototype in year one may serve as a useful benchmark of progress - this milestone may change with your life circumstances but regular evaluation should still take place to see how effectively these goals are being met.
2. Create a Budget
Significant milestones often come with steep price tags. To make sure that you can afford to celebrate these important events, it's essential that you create a savings plan. Start by setting clear financial goals for both yourself and your spouse or partner, aligning aspirations goals together and setting up a budget covering short-term needs as well as long-term savings targets.
As part of your savings goals, it is also essential to establish good record-keeping practices and use a budget planning tool, like Huntington Heads Up(r). This free service keeps you on the path toward reaching them by offering real-time insights and customizable alerts1.
3. Create a Savings Plan
Savings plans are an effective way to meet financial goals such as building an emergency fund or purchasing a house. Setting goals on how much and when you want to save can help identify which spending areas could be cut back while finding extra sources of revenue.
Make it a priority and establish good financial habits by opening separate savings accounts for each goal, such as an emergency fund, car fund and 529 plan for college savings of your child. Doing this can help track progress more closely without accidentally moving money out of savings into checking. Setting smaller short-term goals may also help make saving feel like more of a priority.
4. Review Your Insurance Policies
Life events that mark major transitions - like marriage, home purchases, sending children off to college and receiving inheritances - should lead to a review of your insurance policies and a determination of the coverage required and beneficiaries that should receive it.
Stepping back from daily stressors and reviewing long-term financial goals and insurance policies can give you peace of mind that your finances are secure for the unexpected.
As well as major milestones, other circumstances require reviewing your policy such as changing names or locations; starting a new business; or changing leadership in existing organizations. Furthermore, it's wise to review it every time your renewal period comes around--usually annually.
5. Review Your Investments
If you're planning major purchases in the near future, it is essential that you set financial goals and create an action plan in order to reach them. This could include higher education, purchasing a home or saving for retirement.
Regular reviews of investments should also help ensure they align with long-term financial goals and risk tolerance. As markets fluctuate, portfolios may drift from their intended allocation requiring rebalancing to bring them back in line with your risk appetite. It's advisable that short-term goals should be clearly set out and measurable while medium-term and long-term objectives may need adjusting over time - professional assistance may help with setting and meeting these investment goals.
