Keeping Finances Organized Through Life Changes

There are certain things in life that, without regular attention, will eventually cause serious issues for you. I call these thing self -care. If you neglect your personal health, it will eventually hijack all your time and energy to get well again. If you do not nourish your personal relationships, you will ultimately have to spend much more time trying to sew them back together again (or finding new ones). Organizing and maintaining your family’s finances also falls into that category.

Five years ago, my family’s finances were cruising along after making substantial changes a couple years before. My wife and I had gotten on the same page and were working as a team. We were debt free except for our home, and surpassing our savings goals. We were in the best financial shape of our lives. It felt great! Then my wife made a conscious career shift and things changed.

Rethinking Our Financial Organization

It sure would have been nice to throw our finances into cruise control and concentrate on the new undertaking, but life doesn’t allow for that. In the case of changes like career shifts, personal health challenges, aging parents, and family additions, you must consciously decide to revisit your financial organization.

How To Reorganize Your Finances After a Major Life Shift

Examine It

A few months in to her career change, we felt the turbulence of our autopilot budget. Spending areas like dining and transportation started to creep up. The need for childcare increased. The old habits that had put us in a great financial position before were no longer working now that my wife’s company had been added to the mix. It was time to re-visit our plan.

What Worked Before?

To get on track to being debt free the first time, we sat down for a series of family meetings to get on the same page. We decided that it was time to return to the kitchen table and get back on track. We had to question everything again. We asked ourselves the following:

  • What things were mainstays in our family's fiannces that we needed to change?
  • Should we still be dining out at the same rate?
  • Do we want to maintain the same entertainment subscriptions?
  • Is our cell phone plan still the right one?

Making Time for Family Money Meetings

Since we are equal partners in the decision-making of our finances, we had to make time to come together and agree on the plan. This article goes through the steps to have your own Family Money Meeting. Even if you are the sole financial decision-maker in your household, it still makes sense to set aside time to examine your financial foundation. Our meeting focused on creating a stable financial foundation by following the steps in this list.

Set It

Once we got a new plan in place, we had to make some adjustments to the things that were occurring automatically. First we looked at our automatic savings plans and 401k contributions — since we had some business debt we wanted to pay off, we had decide whether automatic savings was still the best strategy for the time being. Automating your finances can be very convenient, and it worked when we were cruising along, but you must remember to adjust as your family’s situation changes.

Once we adjust to our “new normal,” we were able to go back to automatic savings, just at different levels til we had that debt gone.

But Don't Forget It

Once the plan was in place, we had to keep an eye on whether it was having the desired effect for awhile. We looked at things like whether the new budget categories were staying within range and made sure our savings were growing at the desired rate. Until you can get back to cruising along, it’s important to continue having regular family meetings to make sure you remain on track, while adjusting as circumstances change.

Once we took the time to re-organize our family’s finances it gave us back the time to focus on and prepare for the future. Take the time to give yourself financial organization check-up. If you already have a plan in place, take the time to examine your plan to make sure it still works.

Tip content provided by: Cyrus Purnell at Financial Finesse

The Trust is here to support you.
Ready to learn how?