Six Financial Steps for Each Life Stage

stairs With any major life event, such as a getting a new job, getting married, having children, or retiring, there are typically a few steps you should take to ensure that your personal finances are in order. Neglecting to take the proper financial steps at these different life stages can throw a wet towel on an otherwise happy situation or make a bad situation even worse. The steps I’ve listed here are not meant to be all inclusive so take the time to check with a qualified and competent professional to make certain you’re making the best financial moves for your personal situation.

Starting out in the workplace

  1. Enroll in company health, retirement, and other benefit plans, such as life insurance and disability insurance plans (if available), making the maximum contribution to retirement accounts.
  2. Start a budget and stick with it.
  3. Get car insurance in your own name.
  4. Get renter’s insurance if you are moving out of your parent’s home.
  5. Take additional courses to increase your value at work.
  6. Find a great mentor to help you with finances and work.

Getting married

  1. Get a life insurance policy.
  2. Hire an attorney to draw up a will and/or trust for your estate.
  3. Consider whether to merge your checking account and savings account with your spouse’s.
  4. Update beneficiaries on investment accounts and insurance policies to include your spouse.
  5. Establish savings goals and plans for an emergency fund, necessities, a Christmas Club, and your first home.
  6. Create a new budget, saving as much money as possible should one of you not be able to work.

Buying a home

  1. Look at your budget and decide how a house fits into it.
  2. Choose a type of mortgage and get pre-approved.
  3. Check the selling price of comparable homes in the area.
  4. Find out what your total monthly housing expenses will be, including property taxes and homeowners insurance.
  5. Set aside additional funds for repairs and maintenance.
  6. Check out homeowners insurance policies from companies such as NetQuote so you know you’re getting the best deal.

Changing jobs or careers

  1. Don’t burn any bridges.
  2. Re-work your budget.
  3. Roll over retirement plan assets.
  4. Enroll in your new company’s retirement and benefit plans.
  5. Listen before getting involved in any office politics.
  6. Ask your new boss for ways that you can make the maximum contribution to the success of your new company.

Having children

  1. Revise your will to include children.
  2. Increase life insurance coverage.
  3. Change (add) beneficiaries on your insurance and investment accounts.
  4. Start college saving plan(s).
  5. Consider whether private school or public school works best (and budget now!).
  6. Revise your budget to include more food, fuel costs, and clothing costs.

Starting your own business

  1. Start a self-employed retirement plan, such as a SEP-IRA.
  2. Get disability insurance.
  3. Review business tax deductions.
  4. Get a new checking account so you don’t mingle personal funds with business funds.
  5. Hire an attorney and an accountant.
  6. Carefully consider the implication of a business loan and if you DO get one, spend that money like Scrooge.

Caring for aging parents

  1. Get a signed power of attorney.
  2. Make sure your parents have long-term care insurance or Medicare.
  3. Review your parents’ wills and estate plans.
  4. Make sure you know of all the assets that are in your parent’s name(s).
  5. Talk to your parents. Your role as a caregiver is to help them maintain control over their lives, not take it away.
  6. Investigate ways to find money to care for your parents at home.

Receiving an inheritance

  1. Review tax ramifications.
  2. Put the money into a savings account until you can get your wits about you.
  3. Consider paying off your own high interest debt.
  4. Invest proceeds of the inheritance according to the principles found in How A Second Grader Beats Wall Street.
  5. Decide the best way to use these funds to further the legacy of the person who left them to you.
  6. Avoid get richer quicker schemes designed to only get someone else richer quicker.

Getting a divorce

  1. Hire an attorney to draft a divorce agreement to equitably divide your assets.
  2. Revise your wills, trusts, and beneficiaries on investment accounts and insurance policies.
  3. Budget for alimony and child support (if applicable).
  4. Know the tax ramifications of your divorce and make certain you don’t file as married/jointly. That’s the number one mistake newly divorced people make.
  5. Cancel all joint credit accounts and open new individual accounts making sure the creditor knows of your new marital status.
  6. Close all unused joint credit accounts immediately.


  1. Combine retirement plan assets.
  2. Adjust asset allocation to ensure ownership of conservative, income-paying investments.
  3. Get long-term care insurance and sign up for Medicare (if eligible).
  4. Review your wills and trusts.
  5. Decide when to start taking Social Security payments.
  6. Begin taking required minimum distributions from your retirement plan accounts at age 70 1/2 (except for Roth IRA).

No matter what you’re facing in life, there are important financial steps to take to keep happy times happy and keep sad times from getting worse.

Photo by mnadi

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