Onward and upward: tips for managing in transition
Learning from others’ experience aids transition
To navigate transitions, we need to manage the unexpected while adapting to new ways of working, living and interacting. Each year, people of various ages tackle transitions – whether they are entering a new school or workplace, or embarking on a new stage of life. Here are some thoughts on what to watch for, and plan on, in seven common life transitions:
- Entering high school – Set ground rules and ensure students get acclimated before taking on too much as they juggle academic priorities and plentiful activity options. Anticipate greater transportation needs and independence as students advance, and plan ahead for pricey opportunities such as sports and academic competitions, overseas travel and other school events.
- Starting college – You can still save on taxes by contributing to a college student’s 529 plan but the benefits are greatest when dollars can grow tax-free over time. Be sure you know the process and time required to disperse your student’s 529 funds, as it can take several days or weeks. Expect significant expense for dorm-room furnishings and living supplies in addition to tuition, books and housing. Also, for best possible access to funds, plan to calculate your income taxes and file college financial aid applications, especially the Free Application for Federal Student Aid (FAFSA), as early as possible each January.
- Working after college – Establish a budget and live conservatively to ensure you can cover living expenses and student loans, and try your best to manage or (ideally) avoid debt. Embrace education and work opportunities to grow your skills, and take immediate advantage of employer-provided benefits including health insurance and retirement savings plans, especially 401k-match programs. Set up a separate savings plan to begin building your emergency fund.
- Launching marriage and family – As a couple, discuss and agree on your goals as well as your approach to matters requiring financial forethought. Put in place life insurance and disability insurance to protect loved ones should the unthinkable happen and tap employer-based flexible spending accounts to help manage health care or day care expenses. Start contributing early to a 529 educational savings plan for the greatest tax advantage.