After you have had a new baby, bought a home with a mortgage, changed your job status, purchased a new vehicle, or married the love of your life, you will need to be in a financial position that can support your new lifestyle.
Financial planners will often approach those who have experienced major life changes as these usually have a drastic impact on your finances. However, the vast majority of people do not make financial plans around these lifestyle changes.
Financial advisors always recommended that you pre-plan your finances prior to major life events as opposed to scheduling time thereafter. This is because life tends to become far more complicated after these changes and you are unlikely to have the peace of mind to do so.
This article will outline major life events that you should plan your finances around. We will outline why you should plan for these events financially and the preparations that you should make. Being productive financially tends to enhance the chance of achieving the best financial outcome as opposed to reacting from a panicked position. This is because credit card companies may also capitalize on your desperation. For more information on how credit card companies make money, visit this page.
- Getting Married
For most couples, this is one of the first significant life changes that they will experience after they have graduated. New children, new homes, jobs, and cars often follow this life event and this can be burdensome financially.
While adding a spouse can mean adding a paycheck to your situation, it can also carry more burden in regards to your financial situation as you will need to factor in utility bills and grocery shopping. Rising costs also place increased responsibility on those who are the only working financial contributor in their relationship.
Thus, in order to organize your finances prior to getting married, you should consider the following factors:
– Meet with a financial advisor who only charges a sole fee. Advisors will help you to discuss relevant financial histories and habits, and help you to make concise plans for the future that require planning in advance.
– You should also start an emergency fund as a couple and begin to contribute towards it. Having six months of income that has been set aside will take some time. Thus, you should start to put a percentage of your overall income into your fund as soon as you can. Financial strain during emergencies can place stress on a new marriage unnecessarily.
– Ensure that you have taken care of any insurance that you may need. If you both have experienced health issues and have health insurance in place, you will be more fortunate than more. Otherwise, you will need to take out individual health insurance policies. Group insurance policies through work are unlikely to be enough in regard to coverage. It is also advised to take out life insurance while you are younger and more healthy. This is because premiums will increase each year that you become older.
- Having A New Baby
If you have planned to have children, there are numerous items you need to consider in preparation for this life event.
– You should start a college savings plan. Those of us who have attended college will be aware about how burdensome student loans can be. Thus, you can help your kids to be settled financially by setting money aside for their higher education fees. You can keep this money in a savings account.
– You should also ensure that you have life insurance in place. This is because you do not want to leave behind financial burdens to your spouse or children in the event of your death. You should also ensure that your current health insurance coverage covers maternity as you will need to start a savings account to cover hospital costs if this is not the case.
- Buying A Home With A Mortgage.
The largest investment that most people make is in regard to a mortgage. Thus, you are going to need money in order to make a deposit so it is best to start saving for this immediately. You should also factor in life insurance as you do not want to leave the burden to a family member in order to make mortgage payments in the event of your death or illness.
Whenever this occurs, surviving families often need to sell their homes during one of the most stressful periods of time. The same applies to disability insurance as without being able to work in your prior occupation, you will not need to worry about how you will pay the mortgage.
- A Change In Your Job Status
If you have a change in your job status, you will need to make financial plans to accommodate this. This is because if you chose to leave a company, you are likely to leave behind any insurance benefits that you had. Thus, there are four insurance policies that you may need to take out separately to protect yourself and your loved ones: health insurance, life insurance, retirement plan, and disability insurance.
To conclude, if you experience any of the significant life changes that have been outlined in this article, you should make the financial preparations that I have outlined. The vast majority of people do not make plans and preparations prior to these events occurring and this often causes a vast amount of financial burden and difficulties.
Luckily, implementing the preparations that I have stated in this article will ensure that you do not need to be burdened during stressful periods of your life. Thus, you will inherently be able to focus on acclimatizing to your new lifestyle without fear or worry.
Taking out insurance will also provide you with peace of mind in regard to your financial stability, these policies are relatively inexpensive the younger you are. Therefore, you should consider taking out life insurance at a young age. I hope that you have found this article to be insightful and informative. Thank you for reading.