How to financially prepare for your milestone events this year
Retirement, paying for tuition fees, buying a car, planning a wedding, or welcoming a child are just some of life’s biggest milestones to look forward to. However, such occasions come with a big price tag and entail financial preparation to prevent burning a hole in your bank account. Don’t worry, because there are simple steps you can take to get your funds in order.
- Come up with a financial plan early on
It’s never too early to start preparing for life’s milestones. List down the short and long-term goals you have and plot out the timeline for when you want to achieve them. It’s important to be realistic with your plans and prioritize them according to your personal needs and capability—and not be pressured by trends, social expectations, and other outside influences.
For example, if you are planning on buying a house in the next few years, learn the qualifications and processes for buying a home such as available financing options, permits, paperwork, types of homes and price ranges, and timelines of the homebuying process. Draft your plans and keep an open mind in case your priorities change. Keep your records and budget sheets updated so you can make timely and necessary adjustments.
- Spread your funds into different, purpose-driven bank accounts
Dividing your funds is important in practicing personal financial management and visualizing your goals. It’s best when your payroll, spending, and savings accounts are separate from each other to help you track and organize your money and keep up with set budgets.
You can also open accounts with specific purposes such as a joint account for you and your spouse for saving up for a future big purchase or investment; or a dedicated retirement fund account. Assigning different accounts to each of your milestone goals or purposes will help you develop good saving habits and keep you on track.
- Consult with trusted financial advisors
Making big financial decisions doesn’t have to be something you do on your own. You can work with a financial advisor and use their advice to help you make big decisions. This often requires talking about your goals, looking into your credit score, learning about your spending and saving habits, and other information about your finances. It’s important to be honest with your advisor so they can help you paint an accurate picture of where you are, what you want to achieve, and how you will get there.
Financial advisors can also help you better manage debts and enhance your borrowing experience should you need to take out loans in the future. With their guidance and the financial boost you need, you would be better equipped to reach your life milestones.
- Align your current mindset with your goals
Sometimes the most challenging hurdle blocking us from achieving our plans is our mindset. That’s why it’s important to mentally prepare yourself for the long haul. When your mind is focused, you will be able to maintain the discipline you need to reach your dreams.
To make things easier, create smaller, attainable objectives that will help you reach your ultimate goal. An example would be creating a weekly or monthly savings target or simply having a regularly scheduled check-in with your finances to see if you’re on track. Having smaller goals and establishing a routine also help alleviate some of the pressure of reaching for big milestones so you can enjoy the journey itself, too.
- Be open to change
Last but certainly not least, remember that life comes with surprises. We don’t know when and what will happen but it’s better to plan for different scenarios anyway. Some examples include revisiting your goals every few months, talking to your partner or family regularly to evaluate plans and progress, and monitoring your habits to figure out if anything needs to change according to your current needs and future plans. When you keep an open mind and remain purposeful with any financial decision, you can still achieve your goals despite any adjustments.
Milestones are meant to be enjoyed and celebrated the way you want to. Make a plan, track your progress, seek guidance when needed, and take advantage of resources like SAVii if you need a boost to reach your goals.