When planning and managing your finances you have to stop and think about the many factors affecting personal finance. There are economic factors that affect finances as well as life changing events that will affect your finances. These factors that affect budgeting, saving, and investing must be considered to help you stay financially on track when they happen.
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Personal Finance Issues You May Face
Throughout your lifetime, you may face a variety of
But, if you can set aside time to create a plan, usually there are ways to deal with almost every single financial issue you may face.
At some point in life, everyone experiences a period of unemployed. Many of us have the backing of parents, relatives, or friends to help us through it.
But for those who don’t, excessive debt can often occur if there’s no plan. This is especially true if you had a good job and you were laid off due to no fault of your own.
Losing your job, savings, and then building up debt due to the unemployment situation, is a common problem.
Many people find jobs, but they don’t pay enough for necessities in their location. For example, if your job only pays $35,000 a year but housing in your area costs $24,000 a year, you may have a serious problem finding housing and taking care of basic needs.
When in an underemployment situation getting a side hustle or looking for a higher paying job are both good options. There are many things you can do from home to supplement your income.
Accident or Illness
Whether you were born with an illness or came down with an illness, it can have a huge financial impact on you. This is especially true if your job is what provides you with affordable insurance coverage.
It’s a serious problem for about half a million Americans each year who file bankruptcy due to medical reasons. Sadly, many of them do have health insurance too.
Moving Out on Your Own
When you first decide to “go out on your own” as a young adult, it can be quite shocking to find out how much everything costs.
You may quickly realize that you need to downgrade your expectations and that you may not be able to live at the same level you have become accustomed to while living with your folks.
Although you’ll be faced with many shocking revelations, this is a great time to learn to manage your finances.
Children cost a lot of money. Sure, they are cute. But, the average cost of having a baby in America is between $4000 and $20,000 if there are no complications.
Then you add to it the cost of housing, feeding, clothing, and keeping that child healthy through the next 18 to 22 years if you plan to help them with college.
Not only does divorce cost money just to file the papers and pay the lawyers, there is a longer-term cost to the entire family that may not have been considered.
Of course, no one wants to imagine “what if” when they’re in love and planning a wedding. But divorce has real consequences and real costs that can add up for the long term for a family and the heirs of that family.
Whether it’s your partner, parent, or child who dies, death has many financial consequences. From probate court to who inherits what, we have standard laws in each state that we must follow.
How badly a death can affect you financially depends completely on how well you planned for it.
Everyone hopes to retire someday. But sadly, one in three Americans have no retirement savings. For some time, retirement was a lot nicer for most retirees due to defined benefit plans, Medicaid, and social security.
However, changes in these programs and in the lack of availability of defined benefit plans have changed the outlook for most people who plan to retire in the next ten or more years.
Planning is the Answer!
Every one of these issues that you may face in your life can be mitigated by good planning. Even if you’re in a bad situation now due to poor planning – potentially due to lack of knowledge about personal finance, it can still be fixed with a good plan going forward.
Leave a comment and share how your plan for life changing events that could effect your finances.
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