Financial Planning Tips to Help You Navigate Unexpected Changes in Life

Summary: You’ve carefully crafted your life plan, outlining each move and financial goal. Yet, life takes a sudden, unexpected turn. Learn how you can cope with financial emergencies with these useful financial planning tips.

You think of yourself as a sensible spender who plans ahead and lives within their means. Suddenly, you receive distressing news from your bank — your mortgage payment is likely to go up. Or perhaps a loved one slips and falls, causing unforeseen medical expenses.

Life’s unforeseen curveballs can throw a wrench in the works of your well-laid plans. But, by having a solid financial plan that takes into consideration unexpected expenses, you can weather these financial storms.

A report from CNBC revealed how approximately 70% of Americans feel financially stressed due to life’s uncertainties, underscoring the importance of financial planning for every adult.

In this article, we will explore some valuable financial planning tips to help you navigate unexpected changes in life with resilience.

Solid financial planning tips to navigate unexpected changes

Here are some financial planning tips you should consider to mitigate the impact of unexpected changes.

1. Create an emergency fund

When it comes to financial management, having an emergency fund is vital. Life changes can happen in an instant, so having a financial safety net in place is a must if you want to remain financially independent and as debt-free as possible.

Make it a priority to build an emergency fund that covers at least three to six months’ worth of living expenses, ideally in a separate savings account. Ensure you divert a portion of your savings regularly into this fund. If you ever need to dip into your emergency fund, try to replenish it as soon as you are able. This fund will provide a buffer against unexpected events like job loss, medical emergencies or sudden expenses.

2. Get enough insurance coverage

Another important aspect of financial planning is ensuring you have adequate insurance coverage. Unexpected events can wreak havoc on your finances, but having the right insurance can provide security and peace of mind.

Ensure you have appropriate coverage for your health, life, disability and property needs. Review your policies regularly to ensure they meet your needs and adjust them as necessary. Adequate coverage can make a significant difference in navigating through unexpected changes without compromising your financial stability.

3. Diversify your investments

Investing is a fundamental aspect of financial planning, but diversification is the key to safeguarding your wealth. Spread your investments across different asset classes to help reduce risk and maximize returns.

Doing so can help protect your finances from unexpected events such as market fluctuations or economic downturns. Before you invest, however, consider seeking advice from a financial advisor to help you build a diversified investment portfolio that aligns with your goals and risk tolerance.

4. Adjust your budget regularly

Creating and sticking to a budget is an integral part of financial planning. So make it a priority to regularly review and adjust your budget to future-proof it from any unexpected changes.

To keep your financial management and budgeting practice in top form, track your income and expenses diligently, ensure you’re living within your means and saving for the future. Budgeting can help you prepare for life changes by ensuring you have enough money set aside for emergencies and unexpected expenses.

5. Stay informed about your finances

Ignorance is not bliss when it comes to your money. Keep yourself informed about personal finance matters by doing research and seeking financial advice from reputable sources.

Stay informed about the state of your financial affairs by regularly reviewing your bank statements, investment portfolios and credit reports. Study the markets and stay updated on financial news. The more you know, the better equipped you’ll be to manage your finances and prepare for unexpected events.

6. Seek professional financial advice

Financial planning can be complex, especially when facing unexpected challenges. But you can help make your life easier by building a support network that includes financial advisors, accountants and legal professionals. These groups of experts can guide you with advice on diverse financial matters from insurance to retirement and investments.

Ultimately, these professionals provide valuable insight and guidance that can help you navigate through the complexities of life changes and ensure that your financial decisions align with your long-term goals.

Ride out life’s setbacks with confidence

While you may wish for a stress-free life, life isn’t always as accommodating. However, a well-thought-out financial plan can help provide the stability and resilience you need to navigate through unexpected changes. Smart financial management can help you tide over financial emergencies without massive changes to your long-term plans and daily routines.

Consider speaking to a financial professional before you go about building your plan. A qualified financial advisor can offer you a perspective that you may not get from simple online research or by talking to your family and friends. Mutual of Omaha is here to support you every step of the way toward financial resilience.

DISCLOSURES:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Not all Mutual of Omaha Financial Representatives are Financial Advisors.

Mutual of Omaha Investor Services, Inc. and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation