Life Events and Your Finances: Are You in the Know?

The old saying, “what we don’t know can’t hurt us,” is good for a laugh when we’re talking about the number of calories in a mocha frappuccino. However, we really do want to know as much as we can about how certain predictable life events can affect us, especially our finances.

Although we can’t know everything about what our future holds, we can make some educated guesses and give some thought to the “what ifs?” When women look toward their financial future, they have some unique issues to consider.

Key Life Events that Affect Financial Strategy

For most women, financial planning is not an end in itself, but a means of reaching life and family goals. National surveys have shown that for women, achieving financial peace of mind is over seven times more important than accumulating wealth. Women think particularly of their finances in the larger context of their life and family situation, their loved ones, their values and their hopes for the future.

They especially want to understand and reflect on the key life events that will affect their finances. Issues unique to women include the likelihood that they will outlive their spouses, may have to take care of ailing family members, or may take time out from working to raise children. For women, financial planning is about peace of mind, and financial success is about protecting themselves and the people they love from uncertainty. Here are some life events to think about:

1. Marriage – How will you and your spouse share the management of financial resources?
2. Children –How will you finance their care and feeding for twenty years (or more)?
3. Divorce –Statistics show that 50% of marriages end in divorce. That’s a big “what if?” Not a happy prospect, but one to face with compassion and clarity.
4. Career Turning Points –Will you work or stay home with the kids? How will you stay current and employable?
5. Widowhood –Women born during the Baby Boom are likely to be widowed by age 67 and to remain a widow for 15 years or longer. Nine out of ten women are on their own financially at some point in their adult lives. What if?
6. Caregiving –The need to care for aging parents and/or spouses is becoming the norm as our lifespans increase. Your finances may be affected by the time, energy, and resources required.
7. Retirement –How will you finance the potentially 30-year span after you and/or your spouse leave the work force?
8. 8. Estate Planning –Although planning should take place well in advance of the final life event, this is a truly significant one for all who hope to leave this world a better place and assure the best future and most comfortable transition for their loved ones.

When we think of life as an exciting enterprise, full of ups and downs to be shared and learned from, we keep ourselves in the best position to enjoy it. We can use what we do know to help prepare for the things we can’t know.