A CFP's Take on the Financial Milestones That Change Everything
Everyone has their own unique financial journey, though there are certain milestones that many people experience. But which of them tend to have the biggest impact on money and life?
To get a sense of which milestones have the most ability to change everything, MoneyLion spoke with Hanna Atala, a certified financial professional at Betterment. She highlighted turning points like major income jumps, starting a family, buying a home and receiving an inheritance, and shared her advice on navigating them wisely.
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Career and Income Milestones
Often the first financial milestone in adulthood, earning a first real paycheck can open up new possibilities -- or new pressures. Major income changes can also be a big turning point and lead to significant budget adjustments.
Major Relationship Changes
Getting married or divorced can shift priorities and create new financial responsibilities, often requiring a fresh look at budgets and long-term plans.
Family Responsibilities
Having children or caring for aging parents brings regular, often unpredictable expenses. Money that used to be flexible now goes toward childcare, school, medical bills or eldercare, leaving less room for mistakes or sudden changes.
Wealth and Asset Changes
Buying a home or receiving an inheritance or other lump sum can transform someone's financial position overnight. While these events bring opportunity, they also require careful planning to avoid potential issues.
How Responsibilities Change Financial Decisions
A lot of early financial decisions aren't that high stakes. People are usually able to scale back spending or pause savings if they need to adjust or get back on track. Add in more responsibilities, however, like starting a family or buying a home, and there's more to think about.
"Once you're supporting someone else like a child or a parent, flexibility shrinks and the cost of mistakes rises," Atala said.
Why Mistakes Happen Around Big Life Events
Achieving major financial goals reflect progress in life, but not everyone has the time or forethought to consider the long-term impact, according to Atala.
"These milestones are especially risky because they arrive alongside emotional pressure and time constraints," she said.
Mistakes that people make around financial milestones include underestimating how much something might cost -- having kids, for example, or skipping key protections like insurance or estate planning.
Making Financial Decisions That Last
While it may not be easy to be completely prepared for every financial milestone, Atala shared three things that can help.
Firstly, understand what the milestone actually changes. Does it affect income and expenses, or how flexible the existing budget can be? Then stress-test any decisions by asking what happens if income drops, markets fall or priorities change. Finally, avoid rushing big money moves, especially right after an emotional life event.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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