Finances are an important part of your life – the depth of your finances often has a direct effect on the quality of your life. Finances often determine the kind of education you get, which in turn determines the kind of jobs available to you, which in turn determine your earning power, the kind of neighborhood live, and sometimes the type of people you end up marrying.
Interestingly, the relationship between finances and other aspects of life is a more of a roundabout than a two-way street. Your finances play a part in your life events but some life events also have a direct influence on finances. Below are three live events that could disrupt your financial balance if not properly managed.
- Getting Married
Getting married will have a direct impact on your finances, starting from the wedding party itself, unless you choose to hold a low-key wedding. Even then, the honeymoon might put a little strain on your wedding. Interestingly, most folks seem to be fixated on the idea that getting married will allow you to combine two income, combine bills, and have a lower expense sheet (in theory). What most people often forget is that getting married will also combine two (or more) debts.
If you have not discussed debt burdens with your significant other before getting married, you might be in for a shocker when you discover that your fiancé has about $62,000 in student debts. Before you get married, it is in your best interest to get naked financially so that you know the full picture of the marriage deal. It is also wise to agree on financial priorities with an eye on short-term and long-term financial goals.
- Having Kids
Once you are in a committed relationship, you may start thinking about having kids even before you actually walked down the aisle. However, before you actually start the business of expanding your family, you need to make sure that you have paid off a large portion of your debts. Before you get serious about having kids, you should also build a strong credit score and make sure that you have a working strategy for saving money for short and long-term needs.
Adding a baby to your family will cost you a great deal of money, you can expect to spend as much as $250,000 raising one child. You’ll also need to consider buying a life insurance policy so that you can ensure a measure of financial protection for your child in the event of the untimely demise of your or your spouse.
- Falling Sick
Many people don’t really worry about falling sick; after all, the U.S. has one of the best healthcare systems in the world. On top of that, medical insurance often ensures that you don’t have to pony up too much of your personal money when you do fall sick. Nonetheless, medical expenses have become one of the leading causes of bankruptcy for Americans.
Some medical conditions outside the scope of what your insurance policy covers could love you exposed to an exorbitant medical expense. Even when you have insurance, an unexpected $10,000 medical expense after deductibles could put significant strain on your finances.