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Life’s exciting times could leave you penniless

The start of the year is a good time to start planning, especially if you have a major life event in your future.  If you follow a few smart financial tips these life events don’t leave you broke and help you control the emotional aspect of these events that can lead to irrational financial decisions.
What are some of the major life events that can have a significant financial impact?
Major life events that almost always have a major financial impact include: getting married, buying a home, starting a family, or celebrating major life milestones. 
Why are these events more likely to cause financial distress?
What makes them most dangerous financially is that they all involve emotional components that can deter us from making smart financial decisions.  We can easily dismiss smart financial planning for these events with the idea these are once in a lifetime event and shouldn’t be constrained by money concerns.
What advice do you have for those planning to get married in the next couple of years?
Vow not to start of your married life in debt.  The average cost of weddings is reported to be nearly $30,000 and if mom and dad are not paying for it, that is a mountain of debt to overcome when first starting out as a married couple.
How can couples lower the cost of the wedding to stay within their budget?
Start with the guest list and make sure you are inviting who you want at the wedding. Reception costs can often be the biggest ticket item.  Research venues and look for the best prices which might include the month or day of the celebration to get the best deals. Find talented friends or family who can do some of the wedding day activities like photography, reception music or the cake.
Buying a house is major investment, what is the most important advice for those buying their first home?
Be an informed yet reluctant buyer.  Know what you can afford and where you want to live, but don’t make the mistake of looking for the perfect house.  Those often cost more than one can really afford.  Don’t spend more than you can afford on a home.
What if you find a house that has most of what you want?
Don’t seem too eager to buy.  Signs you really want the house include bringing all of your friends and family to visit the home or making multiple visits of your own.  And don’t compromise on issues that matter to you during the price negotiation.  You have to be willing to walk away from a house.
What are financial concerns with starting a family?
There are big picture items such as staying home with the new baby that requires a complete financial discussion but other smaller events can be problematic as well.  Overspending on the nursery, clothes, toys and child gadgets are just some of the ways that new parents end up with a significant amount of debt even before the new baby arrives.
What about major life milestones, how should we plan for these?
We all know when special anniversaries, birthdays and other milestone events are going to occur so there is no excuse to not be planning well ahead of the date.  This planning starts with a budget that you are committed to keeping and then being committed to saving enough to cover most of the expenses for the milestone celebrations. 

Posted: 1/4/2016 with 0 comments

Categories: Budgeting, Money Matters, Planning

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