Wouldn’t it be nice to adapt to change in a clear-headed way? To be able to navigate the wallet-shock that unexpected life changes can bring, in a calm and considered way? You can.
Whether you have a year or a week to adjust to such monetary upheavals as marriage, divorce, a growing family, or military deployment, you can sail through – as long as you PLAN for it.
Prepare: This first step helps you understand how much money you have to work with. It’s vital to put together a practical strategy for the future. If you don’t already have your financial documents in one place, physically and/or electronically, it may require a little hunting and gathering. Once you do this, keep them accessible, either on your computer or a physical folder. Be ready and organized for the next inevitable life change.
You will need recent bank and credit card statements for account balances, current loan papers, pay stubs with income, tax, and deduction information, and your checkbook register for household bill information.
Have it all together? Good. Now carefully examine and notate your income, expenses, assets, and liabilities. You will need all this data for the next step in your PLAN.
Learn: Ignorance is not bliss! Learn how this event will alter the way you currently spend and save. If there will be additional expenses, be acutely aware of their type and cost. More gas for a longer commute? Diapers or daycare for a baby? The last thing you want is to be hit with an unexpected expense that blows up your carefully planned budget.
To know how the change will affect the numbers in your financial picture, you may need to conduct some research. Thankfully, there is an abundance of high quality, low cost information available. Websites, books, magazines, friends and family members who have experienced what you are about to go through are all useful sources to tap.
Your Credit Union is a tremendous resource too. In our almost 90 years of helping with the ups and downs of life, we’ve pretty much seen it all. Our Financial Wellness Check is a great resource. It’s a free, relaxed review of your finances and aspirations with a goal to help you achieve more by earning more and avoiding common and damaging financial pitfalls.
If you are in the military and are facing deployment, be sure to investigate the plethora of programs that are specific to your needs and situation.
Often a life change inspires new goals. For example, you may want to start an educational savings account to fund your child’s college tuition, or save for a down payment on a home. Your Credit Union offers no-strings advice and a wide variety of excellent, high-interest earning savings accounts, and can help you explore your options to find the best solution. Take the time to assess long-term objectives and figure out how much it will take to achieve them. They too will have to be factored in to your newfangled budget.
Act: Now you need to put your PLAN into action. Because you have completed the first two steps, you should have everything necessary to smoothly transition from old to new. Plug the revised numbers into your budget. Are you over or under? You may have to modify spending habits, reduce expenses, or even sell assets to meet the needs of the pending change in circumstance.
Other action items may include opening a savings or investment account, adjusting tax deductions or exemptions, obtaining or modifying insurance coverage, or meeting with a financial professional for long-term planning.
Resist inertia – sitting around hoping things get done is tempting but self-destructive. All the knowledge and assistance in the world won’t help if you don’t do what you need to do.
Network: Finally, reach out and connect with those who are, or have been, in the same position as you will be. The impending financial predicament may be new to you, but there are scores of people out there who have weathered the storm and come out dry. They can provide you with information, tools, and ideas, and importantly the support you need to be successful with even the most challenging of changes.
Ask people in your family and social circle for suggestions and connections, contact your employee assistance program for free programs and services, log onto online forums and chat rooms. You may be surprised by how enthusiastic others are to share their wisdom and encouragement.
Remember, other than death and taxes, the only other constant in life is change. It’s not a matter of if, but rather when and how. Think of it as an opportunity to be self-sufficient under even the most daunting of financial circumstances. You can do it. It just takes a good PLAN.