When life changes faster than your budget

Life changes can be exciting. You’re having a baby, buying a new house, taking on a new job. But they can also be stressful. Maybe you’re going through a separation, a death in the family or a period where you’re not able to work. Things can change quickly, and financial arrangements don’t always immediately keep pace.

The financial plan built for a different version of your life

Picture this: You’ve got it all planned out. You know what is coming in each month, you know what bills are going out and you know what goals you’re aiming for. Then along comes a new baby, with all that newborn cuteness, and throws even the best-laid plans into disarray. One day you open your banking app and realise the numbers aren’t telling the same story they did six months ago. You’re spending your money in different places, earning it in a different way, prioritising different expenses.

Changes don’t need to be negative to create financial challenges. It’s often the case that we’re working with a financial plan that was created for a different version of our lives. It doesn’t work as well with a change in income, new commitments, a new home or even a transformed household.

When change arrives faster than you planned

Sometimes you might have an idea that things are likely to happen in the future, but then find they arrive faster than you expected. It might take a while for your budget to catch up. Perhaps you’d been thinking about starting a business at some point but then the stars align to make now the right time to do it.

You could find that you’re moving to a different part of New Zealand sooner than you had thought you would. Sometimes shifting to a different region can mean a big change in housing costs. There could also be commuting considerations that you might not have had previously. You might just be thinking about shopping from different supermarkets or paying a different council rates bill.

Life doesn’t always happen on a schedule, and it won’t necessarily happen according to the financial strategy you’ve set out. But moving with the changes can present big opportunities, if you can bring your finances along for the ride.

The costs that shift without warning

We can’t always see change coming at all. Maybe your relationship has suddenly broken down and you’re navigating a financial landscape that is dramatically altered from the one you were used to. Where you used to share the bills, you’re now having to pay them on your own. Relationship separation is a financial event that many New Zealand households have to navigate.

Maybe an income that seems secure is put into jeopardy, or you decide to go into self-employment and need to pay for a lot of new work equipment.

We all know that change is a part of life but when a dramatic change comes your way without warning, it can still take a little adjustment to realign your plans with your current situation.

Reassessing is not the same thing as failing

When your world has changed, you’ll need to reassess a lot of things, not least your finances. This isn’t a sign that your previous plan was wrong, or even that it didn’t work for you. You may just need to recalibrate to get you to a new goal, or to take a different route to get to the one you previously had.

A large number of New Zealand households deal with income variability, and more have opted for self-employment in recent years. This will have brought with it lots of conversations and strategising about what plans might need to change.

Things can change in ways we expect, and lots of ways we don’t. Things that made sense a few years, or even a few months ago, might need another look. You’re not necessarily starting over, just making sure things are still a good fit.

Worth a review?

Sometimes a quick review is all it takes to find out whether things could work better for you. The Better Finance™ team are here to help you, whether you’re making decisions or just understanding where you currently sit.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.