It can be tricky to manage your personal finances when everything’s running smoothly, but when you experience a major life issue? Then it becomes even more difficult. We hope that an unexpected event will help improve our personal finance situation — such as winning the lottery or being headhunted for a well-paying job — but that’s not the reality in most cases. Most major life incidents will negatively impact your financial position, or at least have the capacity to. You can, however, normally maintain your financial situation by taking a few key and necessary steps.
In this post, we’ll take a look at a few common major life issues — and provide tips on how to take them in your stride.
Unemployment
Jobs for life no longer exist, and even people who were relatively secure can find their positions being terminated. It’s important to keep in mind that you will find a new job, but you can’t expect to walk into a new role within a few days. It might take a few weeks, or even a few months. The best way to ensure that loss of employment doesn’t impact your finances too much is to build an emergency fund. Having 3 – 6 months of living expenses tucked away will give you the breathing room you need should you lose your job. It’s also recommended to close your wallet to dramatically reduce your outgoings until you find new work.
Injury and Illness
Even a mild, short-term illness can impact your personal finance situation if you’re in a freelance position or you don’t have the energy to prepare meals and have to rely on takeout food. Long-term illnesses and injuries can have a devastating impact if they’re not managed correctly. A personal injury, for instance, can result in extensive medical bills, reduced income, and expensive home/rehabilitation equipment. Good insurance can help keep these costs down, as can working with a law firm such as Curcio Law to fight for compensation if the injury wasn’t your fault. It’s also recommended to explore any government assistance programs that may be available to you.
Buying a Home
It’s no secret that buying a home can impact your finances. In many cases, buying property is a good investment, since it’s an investment in your financial future. However, there are scenarios in which it can be a bad — or at least stressful — idea. Not accounting for the full cost of home ownership, for instance, is a common mistake that trips up many first-time buyers. The cost of the mortgage may be the main expense to keep in mind, but it’s far from the only one. Property taxes, insurance, maintenance, HOA fees (if applicable), and emergency repairs can all add up to a pretty penny. Before submitting an offer, be sure to take into account the true cost of buying the property. You’ll need to pay these costs anyway, and you’ll be making your finances (and