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5 Major Life Events That Need Financial Planning

financial planning

Have you ever considered getting professional financial advice? You don’t need to have a huge event or expense coming up to get ahead in the money world. Even the smallest savings account can benefit from a sound strategy to use the money effectively in order to achieve growth.

These five major life events all require some financial planning, and unless you have years of experience investing and strategising for sound returns, you’ll need professional help.

1. Getting engaged – $

The rule of thumb is to spend a total of one month of your income on the ring. We recommend saving up over time though!

You don’t need to spend a fortune on the engagement ring, but it’s the main expense in the process of getting down on one knee (if you prefer the traditional way) and asking someone to spend their life with you. It’s a beautiful time, and sure, you want it to be special, but it doesn’t have to break the bank.

Work within your budget, and your partner will understand. A good basic rule is to spend a total of one month of your income on the ring. Save up over time though! And be warned – the price of diamonds worldwide rose 21 per cent between 2011 and 2016 according to The Knot, so if you’re after a big rock, you might have to dial down your ambitions or look at other stones.

2. Getting married – $$

Many people see a wedding as one of the most expensive life events you’ll ever experience, but in reality it shouldn’t ruin you financially. It’s a wonderful time of celebration spent with family and friends, eating good food and drinking delicious beverages, but you still need to plan your wedding budget and ensure you aren’t going to be paying it off for the next five years. You have other life events to save for!

A financial planner can work with you to figure out a savings plan to pay for your wedding, and a subsequent budget that you absolutely should not blow. Practice sticking within certain boundaries early in your married life and you could find yourself more financially stable in the future. MoneySmart research shows an average Australian wedding costs around $36,000 – keep that in mind as a benchmark.

3. Starting (or expanding) a family – $$$

Adding a little one to the family is an exciting time…through the pregnancy and beyond. However, it will cost you a lot of money to raise a tiny human into an independent adult. They have to be housed, clothed, fed, taught, entertained and all sorts of other things that all cost money. You need to consider how much you plan to spend on your children.

Finder suggests that the first two years of a child’s life can cost up to $16,000, while raising someone to the age of 17 will cost almost $300,000. Add much more to that if you plan on sending your child to private school or taking them on regular overseas holidays.

4. Moving house, no matter how far – $$$

Upsizing or downsizing, moving up the road or overseas, when you move house you need a financial plan. It could be that you’re moving into something bigger to keep up with your growing family, so you’ll need savings to be able to afford the extra costs associated with a larger property. Alternatively you’re downsizing and will have a big chunk of cash that you don’t know what to do with after you buy a potentially less expensive property. Bring on the investment advice.

Upsizing or downsizing, moving up the road or across the seas, when you move house you need a financial plan.

Speaking to a professional will help you figure out what you need to do before you make the big move. Financial planning could even help you to buy your first house.

5. Retirement is looming – $$$$$

This may be the most important financial time in your life. You’re about to stop working and your income will essentially dry up. You’ll likely have a pension, but it won’t cover things like buying a holiday home or taking major trips overseas to see family and friends.

If you’re about to leave work, you’ll need a solid financial plan. Your savings might not be at the level you want, so investment is required. On the other hand, you might have a lot stashed away, but want to grow it in a more aggressive manner so you can live less frugally in your twilight years. Whatever the goals, a financial planner can help.

For more information about solidifying your finances for major life events, get in touch with BOQ today.

This blog post is for general information purposes only and is not intended as financial or professional advice. It has not been prepared with reference to the financial circumstances of any particular person or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article.


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