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What are some of the most life-changing financial expenses?
We answer that question today.
One of the most important things you can do as a person with a limited income is to plan ahead. If you know what’s coming down the line, there will be no surprises when it comes time to pay the bills.
We’ve compiled a list of five common life events that can cause your finances to take a turn for the worse.
Divorce
Divorce is an expensive ordeal. Do not underestimate the emotional toll it will take on you and your finances. You may be surprised by how much you’re spending on legal fees on a divorce lawyer, as well as how much extra money your former spouse is asking for in spousal or child support.
Divorce can also be a financial shock to parents who were previously sharing child care responsibilities after a divorce or separation. If both parents are working full time, they’ll likely have to pay more than they did when they were married—and many of us don’t have the means to foot these bills alone.
Retirement
Retirement planning is a long-term project. It’s easy to get frustrated with your progress and lose motivation, especially during times when the market is down and your portfolio is taking a hit. Remember that you’re in it for the long haul, so be patient and stick to your plan. There are plenty of ways to save for retirement—you just need to find ones that work for you.
You may want to start by creating a retirement budget so you know how much money is coming in each month, how much goes out in expenses, and how much is left over for savings or investing or both.
Children
The cost of raising a child is astronomical. From diapers to college tuition, there are innumerable expenses associated with having kids. That’s why you should start saving for your children’s education as soon as possible on top of any other financial goals. Even if you don’t think they will go to college, it’s good practice anyway because it teaches them how money works and gives them an opportunity to learn about investing.
Home ownership
When you own a home, you’re responsible for maintenance and repairs. You can’t just call the landlord when something goes wrong; it’s your job to fix it yourself. That means that any time there is an issue with your roof, plumbing, or electrical systems, you will have to personally find someone who can fix it at an affordable price—and more than likely pay for those repairs yourself. So, it’s essential that you have finances in place when it comes to repairs.
Unemployment
The best way to deal with job loss is by anticipating it and having an emergency fund ready before disaster strikes. This will allow you to pay your bills while you search for new work without draining all of your savings or adding too much more debt onto existing credit cards. Ensuring you have savings while searching for a new career can help you keep up with your bills until you find another job.
Conclusion: Life-Changing Financial Expenses
It’s important to remember that these are just five of the many life-changing financial expenses you might face. There are countless others, and we can’t predict what lies ahead for every person or family. But, as long as you plan ahead and have a plan in place for these things, you should be able to handle them easily.