Throughout your life, there will be more or less stable times when it comes to your economic circumstances. Once you get a job and a consistent place to live, typically you will feel more relaxed with your surroundings and your finances. However, there are plenty of life events that happen that can quickly change your standard of living as it relates to your finances.
Several examples of these life events will come to mind so you can think about them. First of all, if you decide to get a divorce, your money situation can change rapidly. Second, if you or someone in your family gets personally injured, that leads to medical bills and changes in insurance costs.
Third, if you choose to go to school and get a higher education, that can mean a drastic change in your budgets. And, if you decide to move to a new location, there might be a change in rent, the purchase of a house, or the adjustment in taxes that you have to pay.
Deciding to divorce is a significant life decision. Even if you’re amicable with your spouse, the money situation is going to change as soon as details are finalized. There is the matter of child support. There are the decisions of how you are going to split up property.
Alimony, visitation, and property rights are all going to be on the table. If you make a significant amount of money more than your spouse, a lot of that will be going to him or her after the separation is finalized.
After a personal injury, your economic circumstances can change quite quickly as well. For example, if you have medical bills to pay, how are you going to do that? Do you have to dip into your savings? How much is your insurance going to go up, and what is your deductible for the injury that has been sustained? All of these are valid questions and must be answered quickly to avoid the more catastrophic aspects of debt and bankruptcy.
Going To School
Going back to school is expensive! Unless you have tens of thousands of dollars saved up for this purpose, it’s unlikely that you will be able to go to school without getting loans. And in that case, will suddenly be saddled with a distinctive amount of debt. Even with long-term planning, the monthly payment that you have to make can be quite significant.
The final time that your financial situation can change rapidly is if you decide to move homes. Maybe you want to rent in a different location. Perhaps you’re thinking about buying a house. In any of these cases, whether the amount of money you owe goes up or down a lot, it will be an adjustment in your basic standard of living.