Ah, money. It seems like it’s always one step ahead of us. Staying in control of our finances can seem like it takes up a good portion of our week, and that’s just keeping everything ticking over well when things are going well. When a big problem arrives, it can seem like our finances have spun out of control. From nowhere, we can find ourselves in financial difficulties. However, it’s important to remember that there’s always a way to bounce back to financial health. We take a look at some of these issues below and offer solutions to overcome them.
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Buying Too Much House
It’s a big achievement to get on the property ladder. People can save up money years, and when they’re finally homeowners, they’re rightly jubilant! But sometimes, a problem arises. Sometime later on down the line, when the novelty of having the keys to the home has worn off, they realize that making the payments each month is becoming a struggle. They’ve fallen into a classic error, one that is responsible for much “buyer’s remorse”; they’ve bought too much house. They didn’t set the budget correctly, and know they’re left paying more than they’d like for a property that, while nice, isn’t worth the penny-pinching.
Solution
Well, the “solution” to this problem involves being careful before you buy a home. It’s important to check that you can’t just meet the payments, but that you can meet them comfortably. While you might be willing to break your budget when you see a house that you’ve fallen in love with, remember that your enthusiasm for the property might fade…but the mortgage payments will remain. If you’ve already found yourself in this regrettable situation, then look at downsizing. You’ll take a financial hit, but it’ll be much less than holding on to a house that you can’t afford.
The End of a Marriage
In an ideal world, love would last forever. There’d be a 100% marriage success rate, and everything would be hunky dory. Alas, take a look at the divorce figures, and you’ll see that it is anything but an ideal world (though worth mentioning that divorce rates are lower than in the past). If you find yourself heading for divorce, then money will be the last thing on your mind, but it’s worth thinking about. Once you’re out there on your own, you may have to move home, get a new job, and other big things that affect the money in the bank.
Solution
You should hope for the best, prepare for the worst in all matters in life, and especially when it comes to marriage. While you should live like it’s going to last forever, there’s nothing with taking a few steps to ensure your life won’t be in tatters should divorce roll around. This means keeping some of your finances separate; you’ll have joint finances, but that doesn’t mean that all your money should be intertwined. Also, if you leave the workforce when you’re married, try to keep up with some aspect of work – be it studying or volunteering – so you can make yourself employable in case you need to find work.
Unexpected Losses
One day, everything can seem fine. The next, your world has been turned upside down. Sometimes, our jobs are terminated. Sometimes, our partner – and provider – are injured, or, worse, die. Sometimes we’re hit with an expensive medical problem. The thing about life is that anything can happen, and that means that sometimes bad things happen to us. When they do, it can shake the foundations of who we are as people – and also have a devastating effect on our finances.
Solution
We all want things to carry on as they’ve always been, but that can’t always happen. But it’s important to remember that no matter how much it might feel like you’re drowning, it’s always possible to swim. If you lose your partner, then it’s worthwhile looking into what is considered wrongful death; while it won’t ease your suffering, it may help to lighten the financial burden while you’re going through the recovery process. If you suffer from something less serious, such as losing your job, then the key is to be proactive and take action: sitting around feeling sorry for yourself won’t lead to anywhere good.
Having Another Child
If you have one child, then it won’t be long before you’re thinking about repeating the process all over again and bringing another life into the world. But there are some things that you’ll need to keep in mind. Raising a child can be expensive, and the costs are rising all the time. Also, be aware that you may need to juggle additional childcare, which can take up a big chunk of your finances.
Solution
Before you decide to have another child, it’s important that you get a realistic overview of your finances. Do you have the thousands you’ll need to raise your new child each year? You’ll have learned a lot from your first foray into parenthood, but you’ll have gained something else – plenty of baby-related gear! As such, you might be able to keep costs down just by reusing some of your first child’s belongings. In any case, it’s a good idea to have a period where you save money, so you have a cushion of cash to get you started.
Not Planning for the Future
There’s a growing problem in America: most people don’t know how much their retirement is going to cost, and that means that, in a few years, we’re going to have a lot of people who don’t have enough money to live on. The options for changing those circumstances will be limited, too.
Solution
Get saving! It’s never too late to get your retirement fund underway, even if it’s later than you’d like. Talk with a financial planner and talk about your options – they may be able to suggest ways you can raise more money, such as investing or selling assets.
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