A person’s financial capability varies tremendously from one year to another in an unpredictable manner. Over the course of life, you go through many changes that affect your personal finances. Life events, whether happy, sad, or stressful, can plunge you into financial hardship. Every phase of life has its unique challenges. For a more secure future, it’s necessary to reconsider the choices you make. Life events are triggers to begin taking a look at your finances.
You can’t predict the future, but you can protect yourself by learning about the events that require you to revise your budget. Prepare for the next life event, whether good, bad, or ugly.
Enrolling In College
It’s important to learn something new and improve your skills constantly. Having more education correlates with professional success. While education can bring huge benefits to your life, it can be astronomically expensive. College tuition fees have reached an all-time high. This can be explained for a whole lot of reasons – including growing demand, lower state funding, and the salaries earned by skilled workers. Given the rising college costs, it doesn’t come as a surprise that students flock to Canada, a country where studying is very affordable. Tuition fees are less expensive than in major Anglophone destinations, although they’re fairly high as opposed to other countries.
If you want to attend further education, you’ll have to dig deep into your pockets. Not all educational institutions are created equal, especially when it comes to cost. Research your state’s options and make a comparison. To understand what you’ll actually pay, look at the “net price”. It’s the estimate of what you’ll have to pay in a year to cover education expenses. To lessen the cost of college, reduce the number of credits you need to pay to earn your degree. One way to do this is to take AP and CLEP tests. If you do well in these exams, the scores may be counted as credit toward your degree.
Planning To Tie the Knot
Marriage is a bond like no other as it gives you a life partner, friend, and teammate. Marriage is pretty cheap. Not the same thing can be said about the wedding ceremony, which runs up the bills. It’s recommended to set money aside for the expenses ahead of time. What’s to blame for the high cost of weddings? The culprits are food, location, entertainment, wedding photographer, and the dress, to name a few. You can use a personal loan to cover the costs. Personal loans can be used for just about anything. There’s no right or wrong way to plan a wedding. While some brides and grooms use cash or credit cards to cover the expenses, a few use loans to pay for the wedding.
Marriage can affect your finances in many ways. You no longer manage your money as an individual. All financial decisions are made together for the common good of the union. Your credit score remains individual, but your future choices depend on what your spouse brings into the financial picture. It can have an impact on your ability to save, build wealth, or plan for retirement. You would have more financial protection if you weren’t married. Lets’ take an example. If you have a joint mortgage but aren’t married, you don’t automatically acquire your partner’s debt if they were to default on the loan.
Having A Baby
You don’t have kids because that’s what’s expected of you or because it’s what your parents did. Most likely, you do it as a lifestyle choice. A baby loves you unconditionally and enriches the already fulfilling life you have with your partner. Still, bringing a baby into the world comes with a huge cost. Going through pregnancy isn’t without costs. There are doctor appointments, prenatal vitamins, not to mention the hospital stay. When the baby arrives, you’ll need diapers, clothes, food, and a nursery. Let’s not even talk about the future costs of education. You should start saving before you become a parent. The cost of becoming a parent has been steadily climbing for years.
Switching Jobs
Some situations make it mandatory to change jobs. For instance, if your career is at a dead-end at your current workplace, there’s no point in staying any longer. Before making the switch, you might want to consider the hidden expenses. Some organizations offer free training, yet others involve coursework and other preparation with fees. Lacking sufficient skills is a barrier to employment, but you shouldn’t go into debt to prepare for a new career. You might get a better salary at another company, but benefits are a significant part of the deal. You may lose perks such as subsidized daycare.
Some prospective employers expect to meet with you during normal business hours. Therefore, you’ll need to take time off to interview. Depending on your job, you may not be entitled to receive pay for every time you’re not working. And there’s the payday delay. There may be a lag and your paycheck may be issued later than expected. Having an emergency fund or some kind of savings would definitely come in handy. If you switch jobs, you’ll be financially prepared to quit your job.
Depleting Your Emergency Funds
Your emergency fund covers you in the event of financial hardship. It’s advisable to save enough money to cover 3 or 6 months of expenses. You shouldn’t drain your emergency savings on a shopping spree. Use your emergency fund only for a health problem, legal issues, or job loss. If you’re forced to dip into your emergency fund, revisit your budget. Relocate some money to rebuild the emergency fund. Track your income and expenses and pause other money goals. Most importantly, refrain from spending. Make your own coffee, wear those old clothes, and arrange for a movie night at home.
It can be scary to think about all the things that can happen. Planning for future expenses helps preserve your income and savings. Since you’re not an expert, you might want to seek help.
