It’s true that the adage “don’t spend more than you make,” applies to everyone. However, different circumstances in life come with additional budget concerns. Take a look at these six life situations and how you should arrange your finances to accommodate them.
Finances After Starting College
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Stereotypically, college students are poor and for good reason. You have to pay tuition, buy books, and live away from home for the first time, all on little or no income. This is very difficult for people who have never had a job before and did not save money to go to college. The smartest thing you can do to help your finances is to apply for scholarships. If you can get one, it is free money to go towards your education that you don’t have to come up with on your own. Most people come out of college with student loans, but you want to keep them as low as possible.
Finances After Getting a New Job
New jobs typically come with more pay. This makes it tempting to go out and binge spend. It’s ok to buy yourself or your spouse something nice as a congratulation present, but you don’t want to get yourself in over your head. For instance, you really need to think about whether you can afford that new car or not. Give it a month or two before you purchase anything big because this gives you time to adjust to your higher income and to still be smart about your money. You should also think about where you can put extra money to pay off any debts that you have.
Finances After Having a Baby
Having a baby is expensive because you have to buy a crib, dresser, car seat, clothes, and diapers, as well as pay the hospital bill. Ideally, you would have saved up for these items before getting pregnant, but that’s not always the case. When you have a baby, it’s time to look at your life and eliminate expenses that you don’t need. For isntance, think about whether you really need that gym membership or video streaming account. Your clothing budget might also be able to take a hit. An additional consideration is the cost benefits of breastfeeding and cloth diapering.
Finances After Going Through a Divorce
Life is uncertain after a divorce. You don’t know how much money you’ll be bringing in each month until alimony, child support, and new living arrangements are finalized. Plus, there are a lot of added costs because you have to buy new smartphones, dishes, bed linens, towels, and anything else that you didn’t end up with in the divorce. Be careful with your spending until you know what your new life holds. Plus, you don’t want to make any big financial decisions at this time in your life.
Finances After Going through a Bankruptcy
Bankruptcy happens as the result of unwise spending, whether that involves trying a business venture or not. And, in most cases, it doesn’t just erase your debt — you are put on an affordable payment plan that works with your new lifestyle. After a bankruptcy, you need to set yourself up to avoid it in the future. Create a budget and stick to it.
Finances After Going into Retirement
If you planned for your retirement well by putting money into a 401k account, then retirement is the time to enjoy your money. Go traveling, spoil your family, and live comfortably. However, if you weren’t lucky enough in life to save all the money you needed, you need to look into government retirement options. For instance, see if you are eligible for social security income. There are also government funded health care plans that can offset your costs during retirement. If needed, you can also look into a reverse mortgage to give yourself enough money to live. When possible, you can also ask your kids to chip in.
These are just a few life circumstances you might encounter. You should revaluate your finances anytime something big in your life changes. Make sure that you spend less money than you make and that you’re planning ahead for the future.