As your child transitions from their first job to potentially getting married, it’s important to help them establish a solid financial foundation. Here are the key financial issues to address during this life stage:

1. Budgeting and Money Management

• Master Budgeting: Ensure they are comfortable managing monthly expenses, tracking income, and setting financial priorities.

• Save Before Spending: Reinforce the habit of paying themselves first by saving a portion of each paycheck before spending.

2. Building an Emergency Fund

• 3–6 Months of Expenses: Encourage them to build and maintain an emergency fund to handle unexpected expenses or life transitions.

• Accessible Savings: Help them choose a high-yield savings account or other accessible vehicle for this fund.

3. Retirement Savings

• Maximize Contributions: Encourage contributing to a 401(k) or IRA, especially if their employer offers a match.

• Increase Savings Over Time: Teach them to increase contributions as their income grows.

• Roth IRA: Discuss the tax benefits of a Roth IRA, especially if they’re in a lower tax bracket.

4. Debt Management

• Student Loans: Ensure they have a plan to pay off student loans, whether through standard repayment, income-driven plans, or refinancing.

• Credit Card Debt: Teach them the importance of avoiding credit card debt by paying balances in full each month.

• Debt-to-Income Ratio: Discuss how to keep their debt-to-income ratio low, which will be important when applying for a mortgage or other loans.

5. Financial Independence

• Establish Self-Reliance: Encourage them to fully transition to financial independence if they haven’t already, covering their own rent, utilities, and insurance.

• Set Boundaries: If you’re still offering support, discuss a timeline or conditions for phasing it out.

6. Housing and Transportation

• Rent vs. Buy: Discuss the financial pros and cons of renting versus buying a home, especially if they are planning to settle down soon.

• Car Ownership: Help them understand the full cost of car ownership, including insurance, maintenance, and fuel, or whether public transportation might suffice.

7. Credit Building

• Monitor Credit: Encourage them to check their credit report regularly and understand their credit score.

• Use Credit Wisely: Teach responsible credit card use and the importance of keeping utilization low to maintain a strong credit score.

8. Financial Literacy

• Basic Investing: Introduce them to the fundamentals of investing, such as stocks, bonds, ETFs, and index funds.

• Personal Finance Tools: Suggest apps or tools to help them manage their finances effectively.

• Tax Knowledge: Ensure they understand tax basics, including how to file taxes and take advantage of deductions or credits.

9. Health and Insurance Planning

• Health Insurance: Ensure they have adequate health insurance coverage, whether through an employer or independent plan.

• Life Insurance: Recommend term life insurance if they have significant debt or financial dependents.

• Disability Insurance: Encourage them to consider short- or long-term disability insurance if their employer offers it.

10. Savings Goals

• Wedding Fund: If marriage is on the horizon, encourage saving for wedding expenses to avoid taking on debt.

• Home Down Payment: Discuss saving for a future home and the importance of building equity versus renting long-term.

• Travel or Lifestyle Goals: Support them in saving for personal goals like travel or hobbies.

11. Long-Term Financial Planning

• Discuss Shared Finances: Prepare them for conversations about managing finances as a couple, such as merging accounts, splitting bills, or budgeting together.

• Set Priorities: Help them identify personal financial goals, such as homeownership, starting a business, or further education.

12. Estate Planning

• Basic Documents: Encourage them to set up a will, designate a power of attorney, and establish health care directives.

• Beneficiaries: Ensure they update beneficiaries on life insurance, retirement accounts, and other financial documents.

13. Understanding the Costs of Marriage

• Marriage Expenses: Discuss the potential costs of a wedding, engagement ring, and honeymoon, and the importance of creating a budget for these.

• Shared vs. Individual Finances: Introduce the idea of maintaining transparency and communication about finances in a marriage.

14. Networking and Career Growth

• Invest in Career Development: Encourage spending on professional growth, such as certifications, conferences, or further education, to increase earning potential.

• Emergency Career Fund: Help them plan for potential job changes or unexpected career interruptions.

15. Discuss Financial Compatibility with a Partner

• Money Conversations: Encourage open discussions with their partner about financial habits, goals, and debts before marriage.

• Joint Financial Goals: Suggest setting shared goals for saving, investing, and spending as a couple.

• Prenuptial Agreements: If applicable, discuss the importance of protecting individual assets with a prenup, especially if one partner has significantly more assets or debt.

By addressing these financial issues before your child gets married, you’ll help them enter this new phase of life with confidence, financial stability, and a strong foundation for long-term success.

Author: Obsidian A Freeman