Life Changes that Necessitate a Financial Life Planning Review
Life will throw us curve balls when we least expect it, and unfortunately a lot of people are unprepared financially when something unexpected happens. Or maybe you have a plan but an event occurs that forces you to rethink your finances. If you’re wondering what kind of life events might have you reviewing your financial plans, here are a few to keep an eye out for. Remember that everyone handles these events differently, but these are the most common changes people redraft their plans for.
Marriage or Divorce
If you’re planning on getting married, it’s important to talk with your partner about each of your finances such as handling credit or debt, or goals to combine finances. For some people this may be an uncomfortable conversation, so you might want to consider getting financial advice from a professional to help with the process. Having a clear financial objective with your spouse will allow you to focus on preparing for your special day, and put you at ease knowing you can build a successful financial life with your spouse.
Unfortunately, some marriages don’t always work out, and the divorce process doesn’t always go very smoothly. Each partner should ensure they protect their finances by speaking to a professional. It’s also important to handle tasks such as updating your will if necessary, changing insurance policies or investment accounts.
Expanding your family is an exciting event, but it means major financial and lifestyle changes as well. Some of the major things you need to plan for include:
- Insurance coverage
- Health plans
- College funds
- Toys and clothes
- Security precautions around the house
Bringing a child into the world will be one of the happiest times of your life, so you want to be sure you’re prepared for everything to come.
Illness or Hospitalization
One of the most unexpected life changes that can occur is becoming ill or hospitalized. Health remains one of the most important things you need to put a premium on, and is usually the most expensive. If you or any of your family are suddenly faced with any type of sickness, or you want to be prepared in the case that does happen, you may want to review your health coverage or any other insurance plan that an illness or hospitalization would put a dent in.
Whether you’re changing careers, starting a new job, or you lost your job, your finances are going to change. Whatever the case may be, you might want to consider adjusting your financial strategy. If your salary increases, you may want to adjust how much you’re saving or putting aside. If it’s changing negatively, you’ll have to assess ways to replace the lost income in your budget. Depending on how your income is changing, it’s important to understand how factors such as retirement accounts and benefits will alter as well.
Retirement can be one of the most rewarding life changes you’ll want to plan for. Whether you have an established pension or 401k, you might already have an idea of your projected retirement. But it’s always ideal to check on your investments and account for any recent changes to ensure your finances are in order. Preparing ahead of time for your retirement will allow you the financial freedom you’ve always wanted.
The best way to prepare for any life changes is to be proactive with your finances. Here are a few last tips for regularly staying on top of your financial plan:
- Review your financial goals
- Check your saving goals
- View your investments and policies
- List your debts
- Update your information