Making Adjustments Through the Seasons of Change

By Sarah Carlson, CFP®, CLU®, ChFC®

No matter what season of life you're in, it's important to be mindful of your finances. That means knowing where you stand financially at present, and having a clear idea of your goals for the future.

Seasons bring about changes in our lives, both big and small. And while some of these changes are exciting, others can be demanding—especially when it comes to our finances.

Fall is the season of making adjustments. We'll explore some tips for navigating the seasons of change with your finances. So no matter what life throws your way, you'll be prepared to handle it.

Why Seasons of Change can be Tough on Our Finances

Seasons of change can be tough on our finances for a number of reasons. For one, they often mean additional expenses. Whether you're starting a new job and need to buy new clothes for work, or you're getting a head start on your holiday shopping, seasons of change can quickly add up.

In addition, seasons of change can also lead to unexpected expenses. If you lose your job or experience a medical emergency, for example, you may find yourself facing unexpected bills that you hadn't planned for.

And finally, seasons of change can be stressful – which can lead to bad financial decision-making. The holidays are quickly approaching, and when we're feeling overwhelmed, we may be more likely to make impulsive purchases or take on new debt.

That's why it's so important to be prepared for seasons of change, both financially and emotionally. By taking some time to plan ahead, you can help ease the transition and avoid making any costly mistakes.

Tips for Navigating the Seasons of Change

1. Make a budget: One of the best ways to stay on top of your finances is to create a budget. This will help you track your income and expenses, and make sure you're staying on track with your goals. Is this going to be another holiday season where you blow your budget or will you keep your spending in check?

Here are some budgeting tips:

• Figure out where you stand: The first step is to get an idea of your current financial situation. What are your monthly expenses? How much debt do you have? What is your income? Answering these questions will give you a good starting point for creating your budget.
• Set some goals: What do you hope to achieve with your budget? Do you want to save up for a new car? Pay off your credit card debt? Build up your emergency fund? Having specific goals in mind will help you stay motivated.
• Make a plan: Once you know where you stand and what you hope to achieve, it's time to start putting together your budget. There are a number of ways to do this, so find one that works best for you. You can use a software program, create a spreadsheet, or even just write it out on paper.
• Track your progress: Finally, don't forget to track your progress along the way. This will help you see how well you're doing, and make adjustments if necessary.

2. Review your insurance coverage: Seasons of change can be a good time to review your insurance coverage. Make sure you have the right amount of coverage for your needs, and that you're not paying for more than you need.

For example, if you're starting a new job, you may need to update your life insurance policy. Or if you're having a baby, you'll want to make sure you have adequate health insurance coverage.

It's also important to review your coverage periodically, even when there aren't any major changes in your life. This will help ensure that you're not overpaying for coverage you don't need, and that you're prepared for any unexpected events.

3. Plan for retirement: If you're getting closer to retirement, now is the time to start planning. Make sure you have enough saved up to cover your costs, and consider how you'll generate income in retirement. 

There are a few different ways to generate income in retirement, such as:

• Social Security: If you're eligible for Social Security benefits, you can start collecting them as early as age 62. However, your benefits will be reduced if you start collecting before your full retirement age (FRA), which is currently 66.
• Pensions: If you have a pension from your employer, you may be able to start collecting benefits at age 55 or 60. However, pensions typically only provide a limited income, so you'll likely need to supplement with other sources.
• Investments: If you have investments, such as a 401(k) or IRA, you can start withdrawing money from them after age 59 1/2. However, you'll want to be careful about how much you withdraw each year, as you may be subject to taxes and penalties if you take out too much.
• Part-time work: Many retirees choose to supplement their income with part-time work. This can be a great way to stay active and engaged, while also bringing in some extra money.

Conclusion

It's important to be mindful of the seasons of change in our lives, and to adjust our financial plans accordingly. As a team of Spokane Financial Advisors, we help our clients proactively plan for these changes, to ensure that we are on track to achieve their long-term financial goals.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.