Personal Finance Tips Weekly

- One of my favorite things about being a financial therapist is seeing how our journey through life is closely reflected in our journey with money. We may talk about human development in terms of separation and individuation, or intimacy, generativity, and purpose, but money is so interwoven with modern life, personal milestones are often achieved in conjunction with financial ones. Here are six important financial life milestones. First is establishing financial independence from our parents.

This doesn't mean your folks can't help you out sometimes, many of us need a cosigner on our first apartment or to stay on the family health insurance plan for as long as we can. But a checklist for this phase involves taking on responsibility for earning our own money and managing the bulk of our own bills. Next, we choose a career path. This might seem rather straightforward in the beginning but the reality over time is full of twists and turns. Think about it, you're probably going to be in the work force for 40 or 50 odd years.

How do you strike the right balance between your talents, opportunities, and the lifestyle you envision? How do you deal with setbacks, planned changes like a family, or curveballs like health challenges? The fact is your work life requires recalibration with each new phase and development. Another significant milestone is getting out of debt. It's very common to spend the first part of your adult life underwater between student loans, entry-level jobs, and setting up your own household, debt is the norm for more than 70% of all 20-somethings.

But if you value a life of financial stability, it behooves you to come up with a realistic repayment plan that will allow you to retire your debt and focus on building wealth. Getting married or partnering is a perfect example of how your financial life and personal life are intertwined. A committed partnership is all about establishing a team. Sure, we join up for love but that love is also the basis for learning to cooperate, compromise and contribute toward joint goals. Partnering can allow us to take on specialized roles and responsibilities and to more flexibly allocate resources toward child-rearing or career shifts.

Buying a home is an important milestone for many. Though it's by no means the right choice for every person, home ownership is still a common way to build wealth through rising property values and increasing equity. It also requires us to save for a down payment to establish good credit and to understand the terms of a mortgage agreement. We need to be ready for property taxes, home maintenance and emergency repairs. Home ownership is a major decision and commitment. Finally, we have the milestone of retirement.

Just as employment is no longer one size fits all, retirement can mean different things to different people. I like to think of it as the time in your life when you are financially independent enough that you don't need to work to support yourself. Given the means, you may choose to remain professionally active or travel the world, or dedicate yourself to service and giving back. It's all about having the financial freedom to make these choices. Most of us will dedicate a significant portion of our working years to saving, investing, and preparing for this phase.

Of course, many are unable to ever meet this definition of retirement and will either need to find a way to manage on their benefit income, continue to work as long as they can, or rely in help from loved ones. If this is a concern of yours, don't despair. Review your existing assets, set a savings goals, establish an investment strategy, and explore different options. Thinking about major life milestones gives us the opportunity to reflect on what's important and organize our money to fuel the life we want.