Handling Life’s Big Financial Changes
We all know that life is full of changes — changes which usually affect our money as well. There are things like getting our first job, moving out on our own for the first time, getting married, having kids, changing jobs, dealing with divorce or illness, losing jobs, making major purchases, etc.
So when changes come your way that impact your finances, how do you handle them?
For me, I stick with the “hope for the best and prepare for the worst” motto. I believe that the more prepared we are for changes, the better. (Although it’s pretty difficult to ever be 100% prepared for anything.)
Of course, there are plenty of involuntary changes that we can’t expect. People don’t set out aiming to lose their job, get divorced, or become ill. But we can be certain that something unexpected will happen during our lifetime. If it’s a negative change, we can plan for the unexpected by using insurance and emergency funds to help deal with it.
But what about big changes that we do plan for, like buying a new house or quitting the 9 to 5? I once quit my job to go work in Germany for a few months. I remember getting off the plane and wondering what the heck I had done. It turned out fine, but for me at least, the overwhelming reality of a change often doesn’t hit until it’s too late.
And I think that’s normal. You can’t really know what life will be like until you live it. The keys to handling life’s big financial changes are to have contingency plans, imagine how you might handle worst-case scenarios, weigh your options carefully, and be as realistic as possible.