Well…That Was Big. What’s Next?

Change is inevitable. Time flows ever forward.

I know this is obvious to some, but it bears repeating. I have recently had to adapt to a big change, buying our home, and that has effects that reach deep into the other financial aspects of my life. The larger mortgage has affected my savings rate, my spending habits, and my sense of stability. Thankfully, after plenty of planning and reflection within our household, my fiancé and I have reestablished some sense of stability within our budget.

You have probably experienced large changes that led to some financial adjustments before. Maybe that’s what you’re going through now, even. These moments in life can present an awesome opportunity. Each time your financial circumstances change in a big way, you get to ask yourself some important questions:

  • What things do I absolutely need to spend money on this year?
  • What’s valuable enough to me that I want to spend my leftover money on it or save money for it?
  • How much do all these things cost?
  • If I’m setting money aside, where is it going to be best invested?
Then What?

Once you’ve written down the costs of these things that are very important to you, you simply allocate a portion of your paycheck each month toward them. If the goal is more than 5 years off, you might consider investing for it. If it’s less than 3 years away, you probably should keep the money in a savings account. Even though market returns can be pretty predictable over the course of a decade, they are less predictable over smaller stretches of time. If a goal is important to you, you will want to have the money secure.

I find it’s best ask myself these questions on a regular basis anyway, but sitting down with your significant other or on your own during moments of transition gives you the chance to make a big difference over the next few months. It’s not fun, but it’s necessary. Your future self will thank you.

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