How to Prepare for a Major Life Event and Create Financial Stability

By Tom Sedoric and Casey Snyder

Remember landing your first “adult” job out of college? The thrill of a new routine, getting to know your peers, and finally receiving a steady paycheck? You probably also remember the utter confusion you felt when you got that paycheck—not knowing how much to save, what to contribute to your 401(k), or wondering what in the world an HSA is (Health Savings Account, for those unfamiliar with the acronym).

Navigating a life event, like starting a new job or a housing transition, comes with an abundance of important questions and subsequent decisions—many of which relate closely to your long-term financial stability. 

For many of our clients, it’s difficult to suss out the right answers without a little extra guidance. 

Preparing (well ahead of time) for a life event can simplify decision-making and give you confidence in your financial future. Many small, simple actions can add up to significant changes in your life and future financial outlook. 

Here are a few of our top tips for preparing for a life event. 
 

Compare Benefit Plans

Changing jobs? Planning for an upcoming promotion? This is your chance to take a long, hard look at your current benefits and compare them to what’s available through your next role. Consider your paid time off, sick leave, overall work-life flexibility, health and dental insurance coverage, retirement benefits (Roth vs Pre-tax), RSU’s and/or stock options, and other benefits besides compensation. 

If you’re wondering why we’re not suggesting comparing your current versus projected income, it’s because the salary is only one piece of the puzzle. Benefits add up to make a huge difference in your overall compensation, day-to-day work experience, and overall job satisfaction, so it’s important not to take them lightly. We’re not alone in our assertion—according to a study by The Harris Poll for the American Institute of CPAs, American workers favor benefits 4:1 over extra salary. Carefully evaluate your benefit plans before leaping headlong into a new role. 
 

Reevaluate Savings Goals 

As you ascend into your peak earning years, your savings goals need to align with your income. We recommend that our clients maintain a 15-25% overall savings rate—saving the most when you’re earning the most. Consider your goals for retirement and how your savings strategy will help you reach those aspirations. If you’re not on track to building a substantial enough nest egg to support your desired retirement lifestyle, use this opportunity to reevaluate how much you’re saving each month. A small percentage shift can make a massive difference years from now.   
 

Talk to Your Spouse  

This might seem like a no-brainer, but this needs to be close to the top of your to-do list when it comes to major life events. We encourage anyone who’s married to take time to thoroughly discuss what this change will entail for both your personal and financial lives as a couple. Aligning with your spouse is central to a successful housing or job transition. This plays an even bigger role as couples approach and enter retirement, where one of the biggest causes of financial failure is divorce. 

Major life events shouldn’t be cause for a significant shift in your financial life. In fact, they present a perfect opportunity to make small yet impactful changes that will set you up for greater long-term financial stability. In addition to the steps above, we also recommend meeting with your fiduciary ahead of a planned life event in order to get all of your ducks in a row. We’re here when you need us—reach out to our team and learn how we can help you navigate all of life’s biggest changes.

The views expressed herein are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.

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