As we move from one life phase to another because of a life quake (events that rock your world), you can feel as if the wind was knocked out of you. A life transition such as a job change (forced or elected, and even retirement), widowhood, or a divorce can shake you to your very core. These events are not unknown or even unexpected throughout our lives but when they do happen, much of the time it hits us hard.
Susan Bradley of Sudden Money Institute says, “When life changes, money changes”. We all nod in understanding.
How you make financial decisions during transitions can influence your financial life for years to come, maybe your lifetime. This is a time to respond, and not react. This is a time to put the technical side of money to work and let the personal side take a rest.
First, assess the impact to your finances. Because not all life changes have a negative impact on your financial circumstances the assessment may be more critical than if there is a reduction in your financial position. You may be surprised at the number of people who spend unexpected fortunes in a short period of time.
Second, determine expectations. What are your expectations of yourself? What are others’ expectations? What are your expectations of others? Will these expectations evolve as time passes? Imagine an inheritance that is coming your way. What does this mean to you? What does it mean to you for others? What do others feel it means? This may help you better determine who should assist you in this transition. Family comes together during the emotional times and can lead to financial togetherness in a way you didn’t imagine.
Third, take the time necessary to make the right decisions. Separate the chaos in your head to the things you need to do now, those that are approaching, and those that do not require immediate decisions. This will help reduce the chaos that can sometimes fog the vision of the now and the future.
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