If you’ve got a solid financial plan for the rest of your life then congratulations, that’s very sensible. You know exactly how much you’re going to save and when you’re going to do it. By the time you reach retirement, you’ll have a healthy sum to live on and you won’t have to worry about money at all.
If only it were that simple. No matter how extensively you’ve planned your financial future, life has other ideas. From time to time, you’ll hit a life event that throws a spanner in the works of your financial schedule and your plans will all fall apart. That doesn’t mean it’s impossible to salvage things though, you just need to be well prepared.
These are 3 life events that will ruin your financial plan and how you should deal with them.
Nobody makes a concrete plan for exactly when they’re going to meet somebody and get married, you don’t have much control over it at all. That means you can often decide to get married without being prepared.
When you do get married, all of your finances are now completely tied to another person. If you don’t make the necessary financial arrangements, you could find yourself in a pretty bad position if the marriage doesn’t work out. However, if you make the correct changes when you get married, your financial situation should improve.
One of the first things to do is sign a prenuptial agreement with your spouse to make sure that your money is safe. Then you need to review your will and estate planning so you’re both including one another on there. It’s also important that you change your savings strategy so you’re both putting an equal amount in, you can usually reduce the amount that you need to put away each month by doing this.
The biggest cost, of course, is the wedding itself. People spend so much on weddings these days, often on credit cards. There’s no need to do this, you just have to be willing to wait longer until you’ve saved up enough to pay for it outright.
The death of a loved one is always a difficult time and it can have a big impact on your finances. The first thing to consider is the cost of arranging the funeral itself. It can be expensive but there is no way around it. However, you can use comparison funerals sites to find the most reasonable ones. You also have to factor in some loss of earnings if you need to take some time off work.
You can’t really save up for something like this, but encouraging family members to take out life insurance can really help.
One of the trickiest life events to deal with is a long-term health problem. You’ll have a certain amount of paid time that you can take at work but after that, you’ll be on statutory sick pay which is not going to be enough to cover your household bills. There’s no way of knowing when an illness could strike so you should always put money aside into an emergency savings account which you can use to stay afloat if you have to take time off for illness.
Life is never going to be straightforward but if you plan well, you can stick to your financial plan.
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