Adjusting Budgets Based on Life Changes
It can take some time to adopt a new pattern or lifestyle based on changes in your life. No matter the size or impact of these changes, adjusting can be mentally and physically challenging. While dealing with these adjustments, how do you manage your finances accordingly? New Era offers our best tips for reworking your budget to accommodate life’s unexpected changes.
Changing Roles and Relationships
Throughout your life, you can expect to be faced with financial changes as your roles and relationships evolve. Death, divorce, and loss of income are some of the top reasons individuals begin to encounter financial struggles. Adopting a new role as a single parent with one income can be a tough adjustment. It is crucial to note that financial situations are also affected by positive changes. For instance, raises, marriages, starting or growing your family, and buying a home for the first time require some planning as well. A second income or a raise do not automatically translate to financial stability. Make wise financial decisions and spend some time reflecting on the changes in your life.
If you find yourself struggling to adapt to your new expectations and roles, then it may be wise to seek professional help or consult a financial professional. A neutral third party can offer insight that you might not be able to clearly see while coping with the changes in your life.
The first step to reworking and adjusting your budget is to update the numbers based on your new income and monthly expenses. It is also crucial to plan for the near and distant future. Will you need additional sources of income to ensure you aren’t living paycheck to paycheck? How much money can you afford to put away in savings each month to plan for emergencies?
Also, be sure to account for any positive financial changes. Your budget should always reflect your current situation and where you are in life at this moment. When most people rework their spending plan, they account for negative financial impacts to keep their heads above water, but you should also budget for the positive. For instance, if you just received a raise at work, then you should update your financial plan. You may be able to put more money away in savings or plan that relaxing vacation you deserve for all your hard work.
Envision your budget as a flexible tool that changes as you do. It should grow with you. If you create a plan and then forget about it, then you are not utilizing it to its full extent. At the minimum, it is always a good idea to do a monthly check-in on your finances.
An integral part of planning is understanding how to deal with the nature of the unexpected. Being prepared doesn’t mean having millions of dollars in savings. No one can be expected to put unrealistic amounts of money away each month that stretches beyond their means to make a living. When you focus too much on saving – yes, there is such a thing – you can put a strain on your finances and start to negatively impact your health. Find a realistic number that you can commit to saving and know that it’s okay if you can’t put money away every single month. There may be some moments in your life where saving can become a struggle. Find the best method that works for you. It’s always better to start small and grow.
Your health will always come first. If you aren’t healthy, then you spend more time and money taking care of yourself. Life’s unexpected changes are multi-faceted, and we understand that you can’t fix your finances and expect to be healed emotionally. Whatever the change, you need proper time to heal and emotionally cope with the situation you are dealing with. Make sure to take care of yourself and pay attention to your immediate needs.
Do you need help reworking your budget and alleviating the stresses associated with debt? Contact one of our friendly counselors at New Era Debt Solutions to learn more about finding the debt relief option that best fits your needs and budget. We look forward to getting to know you and creating a plan designed just for you. Our counselors are with you every step of the way.