Design your own map to money with picks, plans and pit stops surrounding life’s biggest moments. Then, take your first step down the road to financial success.
Turn Here for Your First Job
You are young and maybe even a little broke thanks to student loans or credit card bills you racked up in college, but this is just the beginning!
The first item on your to-do list is to make a budget. Knowing what your income is and setting up a spending plan is how you can start building your wealth right out of the gate! Be sure to track your expenses to see what you are REALLY buying and where you can trim back to help pay off any debt and start saving.
Speaking of debt, credit cards are the priority, more than your student loans because the interest rate is usually much, much higher! So make your cards your focus, and when they are paid down, you can attack those student loans by paying more than the minimum.
Pit Stop: Retirement! It sounds crazy to talk retirement with your first-ever gig, but even a small contribution now can make a big impact on how your later-self enjoys life. If your employer offers a 401(k) or similar program and offers a match, jump on it! Do what’s required to get that match, because this is like getting free money from your boss, which is pretty awesome!
Next Stop: First House. You’re tired of renting or living with your parents and you’ve finally saved up enough to pay for your first home—yeah! Here’s what you need to know before you roll out the welcome mat.
Starting six months before, check your credit. Get a report and scour it for any mistakes like unpaid or collection accounts, this will give you enough time to work out the kinks. Then take a look at your cash flow, get real comfortable knowing what’s coming in and out each month so you can start to save for the down payment.
Before house hunting, see what you can afford. You don’t want to overextend yourself because your dream home can quickly turn into a nightmare if you’ve purchased out of your comfort zone. Work with a professional to be sure that when you buy, you feel good about where you are with your income and debts.
PIT STOP: Pay yourself first! Each paycheck, deposit a small amount into a savings account. Even 1% will add up faster than you think and make a big difference when you are looking at purchasing a big ticket item, like a home or a car.
Make a Turn and Start Building a Family. Congrats, you are ready for the next chapter and want to become a parent! This is the perfect time to revisit that budget of yours and gear up for the ride of your life.
Look at your budget through a new (and exciting!) lens. Begin by getting an idea of pre- and post-delivery costs and what your health insurance will cover for you. This will give you an idea of the immediate expenses you may have. Then, evaluate maternity and paternity plans from your employer. If you are lucky enough to get paid leave, be sure to account for all bills and essentials you’ll need while you are out. And finally, crunch the numbers on who will and how you will care for your baby if you go back to work, and what the finances look like if you don’t.
And those brilliant kiddos will likely want to do to college someday. So, with the always-rising cost of college, check out a 529 plan as soon as you bring your baby home or even before! More than 30 states offer one, they are also known as qualified tuition programs (QTP). These college saving accounts grow tax-free and as long as they are used for qualifying education expenses, such as college tuition and class materials—like books—they stay tax-free! Already confused? A professional can help you navigate through your options.
PIT STOP: Set up a profile for your child with their 529 plan and share it like your favorite social media video of a cat dancing! This allows family and friends to give the gift of college instead of toys or clothes for birthdays, holidays and other occasions.
Driving Home Retirement. No matter where you are in your savings process, deciding if you will fully retire is as essential as determining your financial plan—maybe you will continue to work part-time or even pursue a passion!
Retirement planning starts earlier than you think, the best time to meet with a professional is in your late 40s or even early 50s—these are your peak earning years and the perfect time to rake in some great retirement assets. Managing them is key to ensure you will meet whatever goals you set for yourself and the route to reach that final destination is just as unique as you are.
Working with a professional can help you come up with the best strategies designed to eliminate any risks in your portfolio, while also opening you up to the possibility of investment that could guarantee you income for the rest of your life.
No matter where you are on your journey, you can start by speaking with a State Farm agent or by visiting LetsStartToday.com and checking out their online tools and resources!
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