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Life's Milestones to Financially Plan for in the Military


The day-to-day life of a military family is punctuated by those moments we always remember. Some are planned, and others are a surprise. Many are good, but unfortunately, some are quite the opposite. From getting married and having children to buying a home or starting a business, to entering or exiting the service, we call them milestones because they stick with us, they often change us, and even the very best of them can introduce big changes that can be both thrilling and stressful.

While some of these major life events may seem far off in the distance, the truth is, they often require significant financial planning and preparation. Without proper planning, these milestones can quickly become overwhelming and lead to financial stress. It’s important to incorporate smart strategies into your future-planning so you can start preparing for these life-changing events now. With a little bit of foresight, you can ensure that your personal major life milestones are not only enjoyed, but also financially manageable.

Why Financially Planning is Important for Life's Milestones

Planning for major milestones allows you to anticipate expenses and start saving for them in advance so you can avoid taking out loans or using credit cards to finance these milestones. It can also help you prioritize your financial goals and prevent overspending on non-essential items. As an exercise, it also gives you a good opportunity to think about (or remind yourself) which things are most important to you.

To help you get started with your milestone budget, here is a list of some occasions that can have the biggest impact on your wallet.

Birthdays — including your own, your children's, and those of your close family and friends.

Weddings — whether it's your own or that of someone close to you, a wedding often ends up being one of the most expensive single days in a person's life.

Baby Shower — if you or someone you know is expecting, a baby shower can be a great way to celebrate and provide necessities for the new arrival, but it's also the first in a long line of new expenses, since it's a baby.

Graduation — including both high school and college, graduation is a milestone that’s always worth celebrating, and there are generally more things to pay for than you may realize.

College or Trade School — This one is probably the winner with the highest average price tag. With tuition, room and board, food plans, books, and of course student loans that generally linger after graduation, college costs often take the cake for having the priciest life milestones.

First Car — if you or your child is getting their first car, be sure to budget for the purchase, insurance, and maintenance costs.

First/New Apartment — moving out on your own can be exciting but it also comes with costs you're probably not used to, such as rent and utilities.

Travel — whether it's a family vacation or a solo adventure, travel is often very expensive, unless you're a savvy couch surfer or you have an excellent imagination.

PCS Moves — if you're planning to buy a home, be sure to budget for the down payment, closing costs, and ongoing maintenance. Not to mention moving services, new furniture, and new appliances.

Retirement — planning for retirement is important at any age, and budgeting for it can help ensure financial security in the future. Reach out to AAFMAA for help on setting yourself up for financial success with solutions that can help you stay confident throughout all of life’s changes.

Don't be overwhelmed by getting exact costs perfectly accurate as you're getting started. Educated estimates will be your friend since you can always revise your table, spreadsheet, or other tools accordingly with revised/specific numbers.

Let's tackle a few of these events in greater detail as examples of how you can consider these milestones as they relate to your life.

Milestones that Require Financial Planning & Budgeting

Birthdays: Budgeting for Annual Celebrations

Birthdays are special occasions that pop onto your calendar each year. As a parent, you'll want to make sure you can provide a memorable celebration for your child. But birthdays can also become a financial burden if they're not planned for properly.

To avoid overspending, start by creating a budget that includes expenses such as gifts, decorations, food, and entertainment. Consider the age of your child and their interests to determine what kind of celebration would be appropriate. For example, a toddler's birthday party might include a small gathering with family and close friends, while an older child might want a bigger celebration with classmates and a special theme.

It's also important to plan for other gift-based milestones beyond childhood birthdays. Teenagers might want a big sweet sixteen celebration or a graduation party, and adults might want to celebrate special milestones like a 30th birthday or a first wedding anniversary with an experience gift, a trip, or a big night out.

Graduations: Budgeting for Education

You'll first want to consider the cost of the graduation ceremony itself. Depending on the type of education and the institution, there may be fees associated with attending the ceremony, purchasing a cap and gown, and even ordering graduation invitations.

Additionally, there may be costs associated with hosting a graduation party, purchasing gifts for the graduate, or traveling to attend the ceremony. It's important to consider these expenses and factor them into your budget to avoid any financial strain.

And, don’t forget what often comes with higher education, or after graduation: Entering your new profession. That could mean uniform costs or purchasing other professional attire, training expenses, and commuting costs, and time out with friends and coworkers.

PCS Moves: Budgeting for Home Ownership

Buying a home is often one of the largest and most complex financial milestones for many people. It's a major investment that requires careful planning and budgeting to ensure you're prepared for the costs. Some expenses to factor in include: closing costs, property taxes, home insurance, and maintenance costs. You should also take into account any fees associated with obtaining a mortgage, such as any loan origination fees and appraisal fees.

Once you have a goal for your down payment savings after working with a real estate professional, create a budget that includes your expected monthly mortgage payments, property taxes, home insurance, and maintenance costs. Make sure to also factor in any potential changes to your income or expenses, such as a change in job or a growing family since these tend to coincide with home buying.

Weddings: Budgeting for the Big Day

Weddings are one of the biggest milestones in a person's life, but they're usually also astonishingly pricey. It's important to set a budget for your big day to avoid overspending and accumulating debt. There are several aspects that you need to consider when budgeting for your wedding, from the venue to the decor to the guest list and catering. The more guests you have, the more expensive your wedding will be.

But perhaps the most important items for this occasion are the ring, the dress and the wedding party’s wardrobe, and the honeymoon. Each of these items is notoriously expensive, so you’ll need to be prepared for it all. Overall, outlining a budget for a wedding you hope/plan to have is crucial to avoid overspending and accumulating too much debt.

Family Planning: The Big Price of Little Kids

Starting a family can be one of the most beautiful and important milestones in a person's life, but it also comes with a lot of financial responsibilities. The cost of raising a child is so significant that it's crucial to ensure you've planned and budgeted ahead of time as much as possible. From diapers and baby food to childcare and education, the expenses add up quickly and they’re a long-term commitment — they’re also just the essentials.

One of the biggest costs for small kids is childcare itself, from nannies to daycare to babysitters, the costs can be significant. It's important to research your options and budget accordingly.

Another expense to consider is healthcare, including prenatal care, delivery, and postpartum care. They all add up quickly, especially if you have a high-deductible health plan.

And as your child grows, education expenses will become a concern. While it's never too early to start saving for college, there are also expenses for preschool, after-school activities, books, and other school supplies. Be sure to factor in the full scope of these expenses when planning for a family.

Retirement: Financial Security Throughout Your Golden Years

Retirement is often the last milestone that we think about when it comes to budgeting for financial readiness. However, it is one of the most important to plan for. It starts with knowing how much you'll need to live on during your retirement years. This number will depend on your lifestyle, medical expenses, and other factors. One of the best things you can do for yourself is to start saving as early as possible so you can benefit from the power of compounding interest in your favor.

If you're already close to retirement age and haven't started saving, don't worry. It's never too late to start. Consider speaking with a financial advisor to help you make a retirement plan that works for you, including life insurance that will provide your loved ones with stability someday when you’re no longer with them. An AAFMAA Membership Coordinator can help you set specific goals and determine how much you need to save each month in order to meet those goals.

Don't forget to optimize other retirement savings options such as a 401(k) or IRA that offer tax benefits and can help you save even more for retirement.

Get Help Financially Planning for Life’s Milestones

Life's milestone moments are inevitable. The first step to budgeting for them is to outline your income and expenses to determine how much money you can allocate to each milestone. But you’ll also need to remain flexible for all the unpredictable expenses that may appear so you can adjust accordingly.

Once you know what you’ve got and what you know is ahead, it is imperative to start saving. Set up a savings account and make regular contributions to it so you’ll be ready to deal with financial burdens that may hinder your ability to achieve future dreams. Financial readiness requires discipline, sacrifice, and patience, but the rewards are immeasurable.