by Judy M McCutcheon MBA
I was telling someone the other day that I wanted to do something but did not get the chance to do it because life got in the way. Then I thought to myself, how absurd. Life does not get in the way; we are either active partakers or passive bystanders in our lives. And you know what the best part is, we get to choose.
The choice is ours and no one else’s. We prioritise and act on things that we deem important to us, even if those things do us more harm than good. It’s like thinking – we must think, so why not create the mindset that has us thinking constructively rather than the destructively. Life will happen, things change, in fact, change is the only constant that we are assured of. Therefore, there are some significant life events that you may want to plan for. Being aware of how some life events will impact your finances, is vitally important. You might want to remain ignorant about the number of calories in that double chocolate fudge brownie with nutmeg ice cream, but ignorance is not bliss when it comes to your finances.
Planning while remaining grounded in the present is a balancing act that we need to get right for the most part. We must imagine the possibilities of what could happen if there is no plan in place. Women, in particular, have a unique set of circumstances to consider as they plan. In general, women think of planning their finances as a means to rather than an end. It is a means of achieving a goal. Women prefer to look at the bigger picture, regarding their family situation – their dreams and aspiration for their loved ones. Being nurturers by nature, we often put other people’s needs before our own. However, you should consider the impact that certain life events will have on your finances and plan accordingly. Traditionally, women are the ones taking care of ageing parents, and on average they live longer than men, so there is a need for them to plan on being alone at some point. Additionally, women would usually leave the workforce to raise their kids, and this significantly impacts their earning potential. It becomes important, therefore, that you have a full understanding of how these and other live events will affect your earning ability, your peace of mind and your financial success.
Let’s look at some of the life events that will have an impact on your financial future:
Getting Married – Congratulations! Love and excitement abound, but this is also a time for some serious reflection. If you are about to get married, even if it’s for the 2nd or 3rd time, you may want to give serious consideration to the sharing and management of your finances. While you should manage your finances in the way that best suits you, it’s important that you agree on certain principles before “tying the knot.” Should you keep your accounts separate? Should you comingle your finances? How are you going to share the financial responsibilities? If one spouse is going to be staying at home, would that spouse get an allowance? It is essential that you carefully consider these options and do not forget the importance of life insurance.
Children – We never consider the cost of raising children, and it is a significant cost. How are you going to care for and feed them for the next 18 years? What about their education, from childhood to university? The time to start thinking about their educational future is when they are born.
Divorce – While it’s not the original intention of marriage, we do have a significant amount of marriages ending in divorce. How do you handle it? Divorce is stressful at best, and it becomes even more so when you are worried about finances. If divorce is your only option then you may want to consider, the effect it will have on your assets. If your finances are joint, how are you going to be impacted? Besides a lawyer, who else should you talk to? You do not plan for divorce, but if it happens, it’s best to be prepared.
Your Career – This is a very big consideration. Are you going to stay at home and raise the kids? Will you only work part-time? How will your career choice affect you and your family? In addition to the financial cost, there is the emotional cost to consider here as well.
Caregiving – Modern medicine has made great strides, and our lifespan is increasing. You should factor in the cost of caring for your ageing parents. What about an ailing spouse? There is also your time and energy resources to consider.
Retirement – People are living 30+ years past retirement. What if both you and your spouse lived 30 years post your working years? What’s your plan for financing those years?
Being Widowed – Losing someone you love is never easy, even if you think you are prepared. Are you prepared financially to live another 20 years on your own? Remembering that on average women live longer than men, what is your financial plan for being on your own? Do not forget that planning your estate while you are alive, is critical.
Your journey through life should be fun and exciting, and it should also be one of learning, sharing, and growing. Having a plan in place to deal with some of these life events, can help to take the sting out of all life’s other “what ifs.”
© All Rights Reserved
Judy McCutcheon is a partner in the firm Go Blue Inc, a Human Development Company. www.goblueinc.net
NOW Grenada is not responsible for the opinions, statements or media content presented by contributors. In case of abuse, click here to report.