Sometimes, life doesn't go as planned. One day you get what you want, and the next, well, you know the drill. To make things smoother, you should plan your finances. That’s what most of us do, right? But the problem is that, we seem to forget that a plan needs to be updated as per changing situations. Things like employment loss, medical issues, and accidents happen, and in such rough times, people need money quickly.
Pexels | Every financial plan needs to be updated according to the current challenges in everyday life
The best strategy, thus, is to hope for the best, and anticipate the worst. Sounds negative we know, but that’s the only way you can stay prepared. In this post, we’ve outlined a few scenarios which you should take as signs to update your old financial plans.
Read - Five Rules to Improve Your Financial Health
Life transitioning moments
If life is treating you well, you need to make sure it stays that way. You need to have a financial system in place before the storm sets in, and by storm we mean life-changing moments that will transform you. When you have a brilliant plan in place, you’ll be able to withstand unexpected situations.
Pexels | To ensure you don't shatter when the storm hits, you need to keep your financial planning flexible and adapting
During your late 30’s or early 40’s
Everyone’s life undergoes shakeups from time to time, but it’s quite common in the age of 30-40. They call it the mid-life crisis for a reason, eh? But jokes apart, this is the time when a lot of things usually happen in most people’s lives – getting a new home, taking care of the family, managing schooling for the kids, making investment and so on. When these things are happening, your financial plans need your attention. You need to ensure they’re in balance with what’s happening in your life, and if not, you need to make some major changes so that you can tackle the bouncers that life may throw at you.
At least twice every year
They say change is the only constant. That’s actually true don’t you think? The earth keeps rotating and so does life for each of us. When nothing is static, why should your financial plan be? It’s not written in stone. In fact, if you don't check on it from time to time, it will start affecting on every aspect of your life. So, at least twice in a year, you need to review your financial plan. You can set it at the beginning of the year alongside your other resolutions and then review it when half the year has passed.
Pexels | You should ideally review your financial plan twice every year
Read – 5 Financial Things to Review Annually
The bottom line
Financial planning isn’t easy, but doing it comes with a lot of benefits. You need to make it work by monitoring it closely. Like we said earlier, the best time to review your financial plan is when nothing out of the ordinary is happening in your life.
