Big life milestones like marriage, buying a house, welcoming a new member to the family, or embarking on a new career path can change a person’s financial situation. Most people understand the need to save up for these milestones, but they may not always consider the importance of readjusting their finances afterward. Here are three crucial ways to realign finances after experiencing a major life event.
Create a new budget
Creating a new budget can help individuals understand their financial situation by reviewing their income, expenses, debts, and savings. It can also help them spot places where they may be spending too much or notice if their monthly bills have gone up.
Identify new expenses: Significant life milestones often come with new expenses. Getting married can bring expenses related to the wedding and honeymoon. Having a baby introduces costs such as food, clothing, toys and childcare. Remember to account for these expenses in the new budget.
Set new financial goals: Financial goals can also shift as individuals go through big life changes. Someone who has recently bought a house may want to prioritize saving to furnish it or completing planned renovations. A recent retiree may want to focus their financial goals on pursuing hobbies like golfing and gardening or spending more time traveling to explore different cultures.
Track spending and adjust: Regularly monitoring one’s spending can help ensure their budget works effectively and they can adjust as and when necessary. There are several budgeting tools and apps to help keep an eye on spending patterns and make informed decisions.
Update life insurance coverage
Major life events can increase one’s financial responsibilities, which is why having an updating life insurance is important. Existing policyholders should make sure that their insurance benefit is enough to cover any new financial obligations they may have. For instance, new parents might need extra coverage to support their children’s future education and living expenses.
A term life policy can be a valuable tool to help people protect families and loved ones from financial problems if the unthinkable happens. Those who aren’t already insured can shop around for life insurance quotes to find the best coverage for their needs.
Some people may need to adjust the type of policy they have depending on their stage of life. Term life insurance is typically less expensive and suitable for covering temporary needs, such as until the children are grown or the mortgage is paid off. Whole life insurance, on the other hand, can provide lifelong coverage and be a way to leave a financial legacy.
Life changes may also necessitate updating beneficiaries. Parents with new additions to their family should consider adding their children as beneficiaries on existing policies. Those with financially independent children may want to name a charitable organization as their beneficiary.
Consider new income streams
A life milestone can sometimes require a person to adjust their budget. To help with this, they can find ways to increase their income, including:
- Salary negotiation
- Freelancing or consulting
- Part-time work
- Gig work (rideshare, food delivery, or task-based services)
Life’s milestones can shake up a person’s finances a bit, but it’s nothing careful goal setting and a solid budget can’t fix. Whether it’s going on a honeymoon, preparing for parenthood, or making exciting retirement plans, it’s possible to maintain a secure financial future.
Media Contact Information
Source: Northwestern Mutual
Contact: Don Klein,
Phone Number:1-800-323-7033
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