Navigating Life’s Transitions and Financial Changes with Confidence

Life is constantly changing, full of ups, downs, challenges, and obstacles. Many of these transitions have the potential to affect your financial goals.

So that you’re better equipped to take advantage of new financial opportunities and mitigate the impact of potential losses, we’ve put together some of our top tips for navigating three common but significant life changes while setting yourself up for financial success. 

Life Change #1: Growing Your Family

Whether you’re getting married, starting a family, or sending your kids off to college, financial planning will help you set you and your loved ones up for success. 

Providing for your family requires deliberate reflection, careful consideration, and a systematic process to ensure each phase of your family’s growth. Pay special attention to the following elements of a secure family financial plan:

Family Budgeting

Assess your monthly spending and saving habits through the lens of your upcoming financial goals and needs. For example, will you need to start setting aside more for childcare costs? Do you anticipate outgrowing your current home? Understanding what you’ll need in the future can help you make better budgeting decisions now.

Education Planning

Education costs are only increasing, so no matter the age of your child or children, now is the time to start preparing. We recommend opening a 529 college savings plan, called the Path2College 529 Plan in Georgia, and evaluating other savings opportunities through the Coverdell Education Savings Accounts (ESA) and Uniform Gifts to Minors Act (UGMA).

Emergency Savings

The rule of thumb for emergency savings is to save enough to cover three to six months’ worth of living expenses. While that can feel overwhelming depending on where you are in your financial journey, every little bit you can save adds up.

Legacy Planning

To ensure you’re setting your family up for success in the future, it’s important to establish key documents and critical roles. Update or create a living will, designate a power of attorney, and make sure your beneficiaries on investment accounts and insurance policies are current.

Life Change #2: Divorce

No matter your unique circumstances, divorce is a difficult and emotionally challenging time, and the financial ramifications only add to that stress.

From managing the division of assets fairly to revisiting your retirement plans and ensuring your children are well taken care of, navigating the financial impact of a divorce requires proper guidance and careful thought. 

Follow these four steps to take control of your financial stability in the event of a divorce.

Evaluate Your Financial Health

Take stock of your financial assets and liabilities, including bank accounts, investments, property, and other high-value items you own both jointly and separately. Gather financial documents, legal documents, tax returns, and other information you’ll need to reference throughout the process. Additionally, evaluate your monthly cash flow needs both jointly and separately.

Build a Team of Professional Advisors

Working with a trusted financial advisor and a divorce attorney can help you divide assets fairly, determine a path forward, and guide you through the divorce process as smoothly as possible. Consider a mediator if you think you might have trouble agreeing to divorce terms.

Develop a Plan for Your Children

Leverage legal counsel to determine custody agreements, child support needs, and alimony payments.

Set Yourself Up for Long-Term Success

It can be challenging to suddenly find yourself solely responsible for your finances, but being proactive is the key. Create a new budget and start establishing credit for yourself. Update existing plans, like retirement savings, and make sure your legal documents and insurance information are up to date.

Life Change #3: Retirement

If you’re in or approaching retirement, congratulations! You’ve spent years working and saving – now it’s time to enjoy your Golden Years and live on your own terms, including financially.

From final preparations to adjusting to a new budget and income streams, reviewing and managing your finances regularly is key to a secure retirement. We recommend taking stock of a few critical components:

Your current financial situation

Evaluate your current living expenses against your retirement savings. If you’re working with a financial advisor, they should do this exercise with you to ensure you can confidently enter your retirement years on your desired timeline.

Your income streams

Create a plan for withdrawing funds from your retirement accounts and pension plans and collecting social security. Again, we recommend working with a financial advisor to help you do this in a way that minimizes your tax impact and the risk of outliving your income in retirement.

Your legacy documents and directives

Now is a great time to review your wills, trusts, estate plans, beneficiary designations, and healthcare wishes. Doing so early, before you or your loved ones need them, will give you the confidence and peace of mind to enjoy retirement to the fullest.

Get our Complete Guide to Life Transitions

Transitions present both challenges and opportunities, no matter what phase of life you’re currently in. Our goal is to help you transform challenges into opportunities and anxiety into confidence so you can focus on the most meaningful aspects of your life.

We’ve put together a complete guide to life transitions, including checklists to help you through each transition, here. Download a copy now to make sure you’re well equipped to navigate life’s inevitable changes.

If you have questions about anything you read, or you’d like more personalized guidance from our team, don’t hesitate to get in touch with us today.