What Does Graduation Mean to You?

Spring has officially sprung, and that means graduation season! Graduations come at a variety of life stages and many are certainly worth celebrating. Whether it be from high school, college, or moving onto a new exciting stage such as getting married, buying a house, having your first child, or becoming an empty nester, these moments indicate the end of something and the beginning of something. We hear the question a lot, “when do I need insurance by?” We’ll walk you through some major milestones that you’ll graduate from and into during your life and help you identify the financial responsibilities that come along with each. We’ve done our best to arm you with the most important questions to be asking while you're at each phase in your life. 

Graduating from High School

High school can be a tough time for young people, but it’s also when kids are becoming young adults, learning about friendships and relationships, and coming into their own personalities and discovering who they are. High school is about learning and preparing for the real world. But once you graduate, now what? You can graduate directly into the next phase of your life, whether that is college or trade school by taking time to think about what is most important to you and what you enjoy.

Graduating from College and Life After College 

Congratulations! You made it through college with diploma in hand. But now what? You’re officially thrust into the working world if you choose. Life after college may seem a little chaotic out in the real world, but trust yourself, the right planning can ensure that you’re on track to landing your dream job. 

You may be asking yourself, what can I do after I graduation? One route to stand out from the competition is to continue on with higher education. An undergraduate degree is only the beginning for those who want managerial positions or dream jobs within a competitive field. Whatever you decide, make sure you choose your dream job realistically. Entering the workforce means that every job is going to have pros and cons. Instead of choosing a specific career or job title, consider the actual components of that job and why it would be enjoyable. Take time to learn about the company culture, see if your family or friends know anyone that works there. Your title and daily work tasks will be even more fulfilling if you enjoy the company of your co-workers and believe in the company culture.  

Graduating to Marriage

Marriage is, for many, their most important relationship and the source of much happiness.  It’s the start of a new phase in your life, when you create a new immediate family. Decisions you used to make on your own will be ones that you make as a team. From the small things like starting new holiday traditions to the big decisions like moving out of state or buying a new car, teamwork and compromise become the mantra of your new life. While we all hope for the best, there are some things that can be overlooked in the months leading up to getting married. Before you tie the knot with your spouse, you may want to discuss some important topics:

Should we get life insurance now? Life Insurance is a great way to protect the futures of those you love. You don’t have to wait until your married to get life insurance, especially if you already have children. If marriage is the first of the many big changes that happen in your life, then it is smart to start looking into policies and finding an agent your comfortable with who shares the same values as you and your family. 

Outstanding debt. When you get married, you retain your individual credit score, as does your spouse. However, when you’re making joint purchases, like a house, the lender will look at both credit histories. Outstanding debt or late payments look bad on a credit report and if your spouse has a bad history it is likely to impact the lender’s decision. 

Children and parenting. At this point in the game we figure you’ve got the basics decided, like if you both want to have kids or not. But beyond the simple questions are things that could affect how you and your spouse should plan for the future. If you do want have kids, when do you want to have your first? Do you have financial goals for stability that you’d like to meet before having kids? How soon would you want to start saving for their college? Do you both agree that college is important?

Bank accounts and bill sharing. In the 21st Century its not all that uncommon for husbands and wives to maintain some types of individual savings account, but a lot of couples still choose to combine their funds It is likely then that you’ll add one another as authorized users on your combined accounts and credit cards. Keep in mind that whichever accounts your significant other is authorized on, will show up on their credit report. If you don’t want a huge credit card debt showing up on your spouse’s report, then consider keeping some accounts separate. Will you share a bank account? Keep individual accounts? Both? Do you have an emergency fund? These are all important questions to answer as you move through your relationship.

Career. How committed are each of you to your careers? Do you live to work or work to live, and how will that impact your time together as a family? What types of personal sacrifices will you make to move up the career ladder?

Graduating to Homeownership

Owning a home is one of life’s greatest achievements, and it’s a chance to provide security for your family and create memories that will last a lifetime. It doesn’t always come at the same time for people. There are some young adults who purchase homes as soon as they can and have roommates pay rent to cover the mortgage, some wait until after marriage and purchase a house together and others might wait until later in life to switch from renting to owning. The American dream of purchasing a home is a big one, and one that shouldn’t be taken lightly. When considering your first home, there are a handful of home-buying basics to keep in mind as you shop:

Evaluate your financial situation. Set goals for a home’s cost, location, type and size.
Choose a real estate agent. Once you find your dream home, initiate a purchase agreement that meets your goals.
Select a lender. Seek mortgage approval, negotiate an interest rate, complete the home inspection and close on your loan.
Purchase homeowners insurance. Your mortgage lender will require you to have adequate coverage.

Graduating to Parenthood

With a steady job and roof over your head, it might be the time to start thinking about expanding your family. Adding child(ren) to your family is a big adjustment – what does it mean to you? Will money be tighter? Fewer nights out? Maybe one of you stays at home while the other works? Graduating to this phase in life comes with major responsibilities and it’s important to remember to have a strong support system around you. Family members and friends will be excited for the next stage of your life and when they offer their help, be open to receiving it. The arrival of a baby is an exciting time, but it also brings additional financial challenges and decisions for the whole family. Below are a couple of considerations to keep in mind:

Check your individual health insurance policy. How much insurance do I need? That is a question with a different answers depending on the size of your new family. There may be specific guidelines on adding coverage for your newborn (most plans give parents 30 days after the birth). Missing this deadline may require waiting until the next annual enrollment period to add your baby to the plan.

Kickstart your college savings plan. You want the best for your kids, and it’s never too soon to start thinking about college education. Farm Bureau offers a variety of education funding options such as the 529 Plan, Coverdell Education Savings Account, and the Uniform Transfer to Minor’s Act.

Graduating to an Empty Nest

Congratulations, you’ve made it through the active parenting years! While some couples look at the “empty nest” as a second honeymoon, it’s reality that couples face challenges of reinventing their marriage for the second half. These years of your marriage can be an incredible time to create a vision for the rest of your time together. Celebrate by looking back on where you’ve come and the excitement of the future!

Graduating to Grandparenthood

It’s often said that becoming a grandparent is one of the biggest joys of getting older. And a majority of experienced grandparents would agree without hesitation. You get to spoil your grandchildren, give them extra snacks and send them home with noisy toys when the day is over. For grandparents, this is the perfect time to meet with your advisors and update any documentation you have to include your grandchildren. It might be updated a beneficiary on a life insurance policy, or adding new names to your will. If you haven’t had the chance to create a will, the arrival of grandchildren should give you the excuse you need to sit down with your agent and think about who you want to inherit your legacy.  

You may consider sitting down with an estate planner. Without a proper plan in place you’re family is less likely to be stuck with a dealing with the aftermath of your estate going into probate, which can bankrupt unsuspecting families. With advanced planning, your family will have clear direction of if money is being donated to charity or going into a living family trust, or being passed down to a specific family member. 

Graduating to Retirement 

Congratulations, you’re retiring! Now’s the time to begin a new chapter in your life, and you still have a lot of it to face. Age simply shouldn’t be a determining factor in limiting yourself and discovering other hobbies that interest you. 
In life, people are never done learning and graduating. Farm Bureau Financial Services is there to help no matter what your most recent graduation is. Learn more about Life Insurance here.

Resources

http://www.experian.com/blogs/ask-experian/2011/02/02/adding-spouse-as-authorized-user-can-help-credit-history/
http://www.experian.com/blogs/ask-experian/2012/09/26/new-spouses-old-debt-wont-hurt-your-credit/