Each and every person on this planet experiences several life milestones. We might not all experience the same ones, and we might not all experience them in the same order. Some might experience one milestone a number of times, and some of us might not experience any of them at all. But life is filled with milestones that are both exciting and terrifying, and we can all relate to that at least a little. Many of the milestones we reach in life put us at a crossroads. They can either make us or they can break us. If we are not prepared financially for these milestones, we might potentially find that we are unable to make it through unscathed. That means that we need to all be sure we have our finances in order, that we have the right priorities and that we are doing what we need to do to ensure that we are on the right track. Otherwise, these milestones – most of which are happy milestones – can break us financially.
That First Credit Card
Everyone should have a credit card for things that require them, such as holding a reservation at a hotel. We all need one, but it’s how we use this card that will determine whether or not we are able to have a healthy financial future or one that’s dismal. This first card is a huge life milestone because it helps you build your credit score and it helps you learn responsibility. But it’s how you use it that will determine where you stand financially from here on out.
If you’re paying for your own education, you have to be financially prepared. This means you heed to search for all the financial aid that you never have to pay back as possible. You have to have the cash to pay for classes, the funds to make sure your educational needs are met, and you have to be able to earn a degree that will pay off in the long run.
Buying a House
It’s one of the most expensive purchases you will ever make in your life, and you have to be able to afford it. Don’t be fooled by mortgages that don’t require a down payment. Put down as much money as you can so you can have the smallest mortgage possible, and try like hell to pay that off as quickly as possible, too. You can do it.
Building a House
Building a house is going to cost more than you ever imagined; trust me. As someone who did it once and made the decision not to do it a second time, you will pay far more for this than you ever thought possible. Do not build what the bank tells you that you can afford, either. Know your finances and be careful to build what you can actually afford, leaving a lot of room for error and additions.
Your wedding is one of the most exciting days of your life, but that does not mean it has to break you. You don’t have to become a poor person to get married. You can pay for a nice wedding, stay under budget and keep your finances in order for other things in life, like having a baby or buying a house or actually retiring at a decent age.
Buying a Car
It might not sound like a milestone, and it really is for some. The reason we’ve included it on this list is that if you are not financially prepared to purchase a car, it can really wreck your finances. If you buy one that’s too much money and has a payment that’s too much, you’re going to suffer. Put a down payment on it and keep the payments low. If you can, pay cash for it and drive it until you literally cannot drive it anymore.
Having a Baby
Even with good insurance, having a baby is a big expense. And it just becomes more and more expensive as your baby gets older. Perhaps you think that once the diaper and formula stage is over that you’ll save some money, but you will just spend more and more as time goes on. And we have to tell you that you have to be financially prepared for this life moment or you’re going to regret it.
If you’re planning on moving, you have to be financially ready for this. While it might not seem like something too expensive, it can be. You might find yourself in a situation that requires you spend money on a new house before your old one sells, and you might find that you are in a position where you’re paying for things for a while on a double standard. Be prepared for this. Your house, additionally, might not sell for what you owe, which can be another huge financial hurdle.
It happens. It’s not a milestone that many people want to admit, but it does happen. Some people just can’t make their marriages work, and it can be financially devastating to you and even to your former spouse. You have to be prepared for this to happen if you are discussing it or thinking about it in the least. It’s why we all need savings and emergency funds and separate financial considerations.
Paying for Kids’ Educations
If you have kids, they’re going to need an education. While you are not required to pay for them to go to college, most people want to at least help their kids to go school. If you plan on doing this, you need to be certain you are financially able to do so or it’s going to cost you more than you realize. On that note, you shouldn’t offer to pay for your kids’ weddings, either, if you don’t have the cash to do so. It’s a bad idea to go into debt for something like this – there are no exceptions to this particular rule at all.
Photo by Tim Boyle/Getty Images