WSECU: Life's Financial Milestones


by New Day Producers

Posted on October 8, 2012 at 11:00 AM

Updated Tuesday, Oct 9 at 3:26 PM

Life’s Financial Milestones 

Life is chock full of exciting events and milestones…from college to retirement and beyond.  With nearly all of these life changes comes the need to navigate an accompanying financial change as well.  Suzanne Klenk is here from Washington State Employees Credit Union to share some helpful tips on managing these financial milestones so that we can spend more time enjoying our life events!

Where do we begin?

At WSECU, we like to coach folks to plan for longevity…a life that is planned for can be well lived! 

Let’s begin with your first job. It’s an exciting time…and it is easy to overlook some great opportunities.  The first of which is a ROTH IRA.  Beginning your retirement savings with your first paycheck is so smart.  The sooner you begin, the better prepared you will be.  The ROTH is so great because it is post-taxed money.  So, when you pull it out, years down the road, and presumably when you are in a much higher tax bracket, you will do so without paying taxes again!  Also, Deferred Compensation is a pre-taxed retirement plan that is worth looking into.

Other tips to consider:  Find out whether your employer has a 401K plan where they match funds.  Not taking advantage of that is leaving money on the table, and nobody wants to do that!  Also check into flexible spending accounts for commuting costs, medical costs, childcare, etc.  Pre-Taxed dollars to pay for expenses that you will pay for anyway.

Let’s take a look at another financial milestone: Marriage.  Money issues can cause relationship issues, so begin your relationship by talking about how you will handle money as a couple.  Talk about:

·     Joint or separate accounts?

·     Who will pay the bills?

·     Insurance…Life, Health, Long Term Care, Car, etc.

·     Consult a Tax Professional to determine how your marriage will affect you tax wise and what your options are.  Especially if you are also purchasing a home right away...Many opportunities to save on your tax bill!

·     Consider a Financial Planner!

Another huge financial milestone: Having children.

At WSECU, we encourage that first savings account begin as soon as possible.  Saving is a lesson you can begin teaching immediately.  With the increasing threat of Identity Theft, we encourage keeping your little one’s social security number private.  Open an account for baby and allow family and friends to contribute to that account.  Be careful about sharing your child’s personal information with too many people…even family.

Also, with college costs sky rocketing, look into the GET Program.  Buying credits at today’s prices is one of those synergistic investments!  It is said that it will cost over 200K to raise a child born in 2012 to the age of 18…not including college costs.  Get started now and college will be one worry you can take off the list!

Our next financial milestone: Buying a home.

Again, we recommend a tax professional and a financial planner.  Two easy places to save money are:

·     Home Owners Insurance…Just raising your deductable from $500 to $1000 can mean a substantial savings.

·     Plan to make at least one extra payment per year.  The easiest way to do this is to divide your payment by 12 and make that little extra each month.  You can share years off your mortgage and cut your interest paid, almost in half.  This is HUGE!

Now, to some less pleasant milestones.

Divorce can wreck you, not only emotionally, but also financially. Washington is a community property state…which includes debt.  The court may rule that your former spouse must pay a debt, but if you are joint, you are still responsible.  Whenever possible, refinance debt that you have taken and ask your former spouse to do the same.  It is also good to close all joint accounts including credit account, savings accounts, etc… If there are children involved, some accounts may have to stay open, so have a written agreement on how this account will be managed.

By the same token, death of a parent or spouse can send your life into financial and emotional turmoil.  Ask a trusted family member or friend to attend meetings about life insurance, wills, etc.  They can fill in the blanks for you.  Also, contact your creditors and other folks you have financial business with.  Let them know of the death and that there may be some settling time.  This will give you some time and space to get things on even ground without any pressure.  It will also give you an opportunity to ask for a list of documentation you will need to settle accounts or access information and benefits.

Now, back to a happier milestone: RETIREMENT.

A goal all of us hope to get to with the means to enjoy it!  At WSECU we have financial planners that recommend beginning living on what you plan to retire on at least one year prior.  This will allow you to make adjustment, discover hidden costs and also decide if you are really ready! If you don’t have a financial planner, this is a good time to find one and Credit Unions are terrific places to begin looking.

For more information about Washington State Employees Credit Union, please click here.

If you have a financial question for Suzanne, or would like to arrange to have her present a financial workshop for your business or organization, email her: