Some people are really good at planning ahead; others… not so much. Regardless of which camp you find yourself, there are some life events that really should make you stop and take stock of your financial situation.
If you have a budget, you’re already a step ahead! Budgeting helps you guide the spending and saving decisions that can keep you on track with your financial goals.
But don’t let your budget lull you into complacency because we’ve all been there: the times when we hear John Lennon’s sage advice to his son: “Life is what happens to you when you’re busy making other plans.” It’s those times in particular that should prompt you to step back and thoroughly analyze your financial situation. You might just need a slight tweak – or you might find that a complete overhaul is the only way to forge ahead.
Keep in mind that successful budgeting is a work in progress. Ideally, you should evaluate and adjust it on a regular basis. But if a monthly audit just isn’t a reality for you, be sure to take advantage of these big life changes to adjust your planning.
You just got married.
Marriage changes everything – including your budget. Whether or not you and your spouse decide to manage your finances jointly, you now likely have to pay household bills together and plan (and save!) for financial goals together. Because no two relationships are
exactly the same, no two couples will have the exact same budget or financial management skills. What’s important is that you and your spouse openly discuss both of your short-term and long-term goals and both provide input into how you’re going to achieve those.
You just found out you’re expecting.
You have nine months to figure this one out – but don’t wait until that last month! There’s plenty to consider, and you don’t want to be worrying about your budget right before your due date. Make a list of all the long-term child-related expenses that you can start saving for today, from early childcare all the way through college. Yes, it might seem like quite a leap, but planning (and funding) such expenses now will ease the financial crunch in the future. And remember, it doesn’t have to be drastic: Set up a savings account and add a little money from each paycheck.
You just got a raise (or a better-paying job).
Maybe your boss has finally started to realize what an excellent employee you are. Or maybe not… and instead you took your show on the road and scored that higher-paying job at the competitor’s shop. Either way, your increased take-home pay should be built into your updated budget. Try putting those extra wages toward accelerating debt repayment or depositing them into your emergency savings account that can cover 3 to 6 months of your living expenses.
You just paid off your debt.
Congratulations on paying off that high-interest credit card or student loan. Now’s definitely the time to review your budget to make sure that you have a plan for the money that was previously going into your debt repayment. Rather than losing track of those funds by frivolously spending them, consider “repurposing” the same amount to pad your emergency savings. Or you could choose to fund other important accounts such as your child’s college fund, a savings account for your next mid-term goal like buying a car or a boat, or your retirement savings. If you transition those funds immediately, you’ll never even notice the move – you’ll build up an important account without feeling the financial impact on your daily life.
You just lost your job.
Even though we’re seeing relatively low unemployment rates in today’s economy, there are still millions of people in America who are out of work. Losing your job can be morally and financially disastrous. If you weren’t able to build up your emergency savings while you were comfortable in your job, you might not have much to fall back on while you’re unemployed. Your first step if you face unemployment is to assess which expenses you can cut out immediately to maximize the amount of cash on hand until you can find a new job. Pare down your budget, and put basically all non-essential expenses on hold.
You just bought a home.
From mortgage payments and any neighborhood association fees to homeowner’s insurance and home warranty payments to those inevitable home repairs, your budget will definitely look different now that you’re a homeowner. Does your new home need remodeling or other major enhancements from the get-go? Make sure you build such items into your budget. And remember, now that you bought a home, you’ll be moving! Be sure to calculate moving expenses into your budget to account for things like a rental truck or movers and even plane tickets to get your family to your new neighborhood.
You just moved.
Whether you relocated across the state or across the country, moving to a new house in a new city requires an adjustment. And we’re not just talking about an adjustment to a new home, but a financial adjustment to account for cost-of-living differences. Your living expenses have likely changed, higher or lower depending on your new environs, now that you’re in a different place. Your new budget should reflect that change.Your budget is very personal. You can take the advice of financial advisors, but ultimately the choices you make are yours alone – and affect your money. The friendly folks at DebtGuru.com understand that your situation is unique. Work with us to find the financial solutions that make the most sense for YOU!