Many Americans create bucket lists of things they would like to do before they die. For some it includes travel, and for others it includes things such as giving back and donating their time. What many people don't have is a financial bucket list or a list of financial goals and obligations they would like to achieve in their lifetime.
Here are some ideas for your financial bucket list:
Pay off All Your Debt
While some may consider this a lofty goal, for many it means peace of mind and less stress. Some psychologists say that individuals are suffering terribly because of their debts. According to a survey by AP-AOL, roughly 27% of individuals reporting high-debt stress said they had ulcers or some form of digestive tract problems and 44% said they suffered from migraine headaches. The total debt of consumers in the United States as of March 31, 2012 was $11.44 trillion. While this includes household debt and consumer debt it means that each American owes over $36,000, based on a population of approximately 314,686,000. This isn't the type of burden you want to leave to your children or your estate. By paying off debt you can rest assured that you won't be a burden to anyone.
Own Your Home
This ties in closely with point number one, and it can also be seen as achieving the America Dream. Owning a home is seen as an expression of personal freedom, as it has been ingrained into the American culture since the mid-1800s. Owning a home marks a milestone in one's life, giving homeowners a sense of pride and accomplishment. A 2009 American Housing Survey (AHS) shows that only about 25% of homeowners have no mortgages, so crossing this off your financial bucket list should definitely give you a feeling of triumph.
Max out Your Retirement Fund
Whether you are growing your nest egg in a 401K or a Roth IRA, your goal should be to put as much money away for retirement as possible. UC Berkeley Center for Labor Research and Education found roughly 75% of 401(K)s are below $60,000. Ensuring that yours is maxed out will make retirement a lot less stressful. Each year the 401(K) is indexed against inflation and in 2012 the maximum contribution limit is $17,000. CBS News reported that only 5% of 401(K) owners max out their contribution limits in 2011.
Save for Your Child's Academic Future
According to the College Cost Projector, tuition costs increase by almost twice the rate of inflation. 2011-2012 tuition costs averaged over $17,000 for students attending public schools and over $38,000 for students attending private schools, according to College Board.org. There is no doubt that saving for your child's future should be on your financial bucket list. The College Cost calculator estimates that tuition increases are happening at about 5-8%, meaning the $17,000 it would cost for a child to attend post-secondary today may increase to around $40,000 in 18 years (based on a 5% tuition inflation rate).
Having an emergency fund is crucial to feeling a sense of safety. Many experts state you should have between three and six months of living expenses in your emergency fund so that you can combat unexpected medical expenses or home repairs without putting financial pressure on your family.
Give to Charity
Philanthropy plays a crucial role in American society. As citizens of a First World nation, many individuals feel the need to give to those less fortunate or to organizations they support. In 2010 alone, $300 billion was given to U.S. charities. With so many causes near and dear to their hearts, many people feel the need to make a large lump sum donation to a charity before they pass away.
The Bottom Line
Whether it is giving back to the community or saving for your children's education, there are many things that can be on your financial bucket list. The idea is to create a list that secures your future time and leaves a legacy of what you believe in after you pass on.