I just turned 37 2 months ago and I have had a lot of major life changes in those years. Especially the years since I was in my early 20’s. I went back to grad school at 26. I got married at 30. We bought a house at 31. We had our first child at 32 and our second at 35. We also bought our second house at 35. So LOTS of major life changes. For all of these life changes, we had to prep our finances. These are all things that can cause major disruption to your finances if you aren’t prepared. I want to share how to prep your finances for big life changes so that you aren’t thrown for a HUGE financial loop.
How To Prep Your Finances For Big Life Changes
Do your research: Before any big decision or life change, you want to do your research. If you are going back to school maybe research different colleges, financial aid, student loans and figure out long-term what will be best for you. The same with houses. When we bought our house we looked at maybe 30 houses, we researched areas, finances, best mortgage companies etc.
Make a savings plan: Depending on how far in advance you know about this change you may be able to put away a good chunk of money towards it. Before we bought our first house we spent a long time saving for a down payment. After that its good to have an emergency fun as well as other types of savings accounts.
Know your end goals: Is your end goal to buy a house? Is it to save up a 20% down payment for said house? Is it to go back to school and not have to take our loans? Is it to be able to take a really lavish vacation where you’d be taking time off work etc? Knowing your end goal can really help you plan out and save and also gives you that vision for what you’re going to be wanting in the future. It’s like your vision board.
Put a contingency plan together: When buying a house you might have the downpayment and fees saved up and that’s great but more times than not buying a house can come with unforeseen costs. Most of the time if you are also selling a home at the same time you will have repairs that need to be made. You may also have repairs to make to your new house, things that need to be purchased, setting up things like alarms, lawn services etc. All of these things cost money and can be unwelcome financial burdens if you don’t plan ahead! Having a contingency plan or account in place is so helpful!
The bottom line:
All of the things listed above can help you ensure you stay in a good financial situation. You wouldn’t want to have to max out a credit card which could really hurt your credit or miss payments because you had to use the money for something else that you could have avoided had you had a plan on how to prep your finances for big life changes.
Do you have a big life change on the horizon?
This post was written in 2020 and recirculated for 2021
I’ve had a lot of the same expenses in the last 10 years, too. Well, except grad school. But I’ve thought about doing an online program to get my teaching certificate which is a big expense. My parents are in the process of buying a second house on a lake in Florida and they are going through all the prep work and gathering statements and all of that right now!
Planning ahead is always a smart move. Sometimes big life change take you by surprise, but when you are able to get ahead of them…having a solid plan helps so much!
Very good advice; having a solid plan can definitely help with those feelings of anxiety and trepidation, which I think is normal with financial matters.
I have been doing a saving challenge this year and been doing a good job saving each week. I just need to put that money into an account that helps me invest it.
You’re always so on top of your finances, Neely! Thanks for the tips! 🙂
Charmaine Ng | Architecture & Lifestyle Blog
http://charmainenyw.com
I’ve had a lot of the same expenses in the last 10 years, too. Well, except grad school. But I’ve thought about doing an online program to get my teaching certificate which is a big expense. My parents are in the process of buying a second house on a lake in Florida and they are going through all the prep work and gathering statements and all of that right now!
Planning ahead is always a smart move. Sometimes big life change take you by surprise, but when you are able to get ahead of them…having a solid plan helps so much!
Finances can be a large beast to conquer, but this helps make it all that much easier. Organizing your thoughts can be helpful in so many situations!
Thank you so so much for the very valuable information. I need to get my finances in order, there is a lot that I don’t understand quite frankly.
Very good advice; having a solid plan can definitely help with those feelings of anxiety and trepidation, which I think is normal with financial matters.
Me and my hubs, we are in process of buying our first apartment. This post came in the right time. I needed some encouragement. Great tips. Thanks!
This is so helpful!I definitely need to be better about researching, planning, and saving.
This plan is great! I think you nailed all the important points in taking care of domestic finances. Thank you!
Big life changes start with trying to prep yourself for it.
I have been doing a saving challenge this year and been doing a good job saving each week. I just need to put that money into an account that helps me invest it.