Financial plans are an essential part of anyone’s financial journey. They help create a road map worth following, leading to financial success and stability. Yet many people imagine financial plans as being static and changing.
The truth is that financial plans can (and should) change. Certain life events require us to revisit our finances and establish new goals. Here are a few instances where you may need to adapt your financial plan.
Reviewing Financial Plans
Even without a significant life event, everyone should aim to look over their financial plans once a year – at a minimum. Consider how much your life has changed over the years. Every year was slightly different, right? This means that your finances have changed as well, and thus a quick check is always a good idea.
Education
Planning for an education can be a challenge, especially given the financial weight that often comes with it. The discussion of education finances is likely to come up in two instances: parents saving for their children’s education or an individual trying to save up for their own future. Both require planning and sometimes additional guidance.
For parents, there are tax-free ways to save for college (529). For individuals, there are scholarships and other avenues worth pursuing, even when funding is tight. Student loans are always an option, but be sure to do your research before making a decision.
Marriage
Believe it or not, many financial concerns go into marriage. First, there’s funding for the big day. Weddings tend to be expensive, with the average cost hovering around thirty thousand dollars. Ideally, every couple should understand their finances and what they can comfortably afford. One does not want to start a marriage in debt.
Second, there’s the combination of finances. Most couples will combine their finances before, during, or after the wedding. This can be a complicated process, made more challenging by the more sensitive subject of finances. Couples can choose to fully combine finances, keep separate accounts but open a shared account, etc.
New Baby
It should go without saying that having a baby can get quite expensive. Even the birth process can add up quickly, thanks to medical bills and hospital stays. Thankfully, a good health insurance plan can help reduce these costs. Parents seeking to adopt will likewise face significant expenses, as this is not a cheap process. Adoption costs upwards of fifty thousand dollars, so keep that in mind.
New and expecting parents should remember that the financial changes do not stop upon birth. There are countless expenses of raising a child, all of which add up over time. Yet another reason to check your financial situation every year.
Buying a Home
Buying a home is perhaps the most expensive purchase an individual can make in their lifetime. It’s no small decision to make, to be sure. The process of home buying requires a fair bit of planning, especially as one builds up their down payment.
Article originally published on EtienneKiss-Borlase.net.
