Four Questions to Help with Financial and Life Transitions

By Mike Cona on April 14, 2023

All of us at one point or another will go through periods of personal and financial transition. Whether it’s getting married, having kids, retiring, or losing a loved one; these life changes can be very stressful due to the uncertainty of what comes next, both personally and financially. Although the stress that accompanies financial life changes often can’t be eliminated, we can find comfort in knowing that many transitions in life can be more easily managed by having a
financial plan in place and making adjustments when needed. Rather than using age to measure where you should be in your financial journey, think of your life in various phases. Once you know which phase you’re in, these transitions can be better managed. Here are four helpful questions to ask during those transition periods:

What Does My Current Financial Situation Look Like?
As you move forward in any transition, it’s important to know where you’re starting from. Take a long look at your overall financial picture to determine your financial net worth and what your income and spending patterns are. Then look at your priorities and any financial commitments– are these likely to change during this transition? A review of your portfolio is also in order, to ensure it properly aligns with any updates to your risk tolerance and financial outlook.

Do I Still Have the Same Goals?
If it’s been a while since you last quantified your financial priorities, it’s possible that your goals have evolved. For example: maybe your family has changed or grown, or funds set aside for a specific purpose ended up being more than what was needed. Both of these are okay – it’s natural for life goals to change over time. Have a conversation with yourself about your new goals. Involve your family in the discussion as well so that you can align your combined
priorities as much as possible.

How Much Risk Should I Be Taking?
Life is inherently risky, and not just as it relates to investing and asset allocation decisions. One way to help lessen risk is with an insurance policy. In light of any changes to your life circumstances, consider reviewing your insurance policies and ask yourself, “is this a good time to increase or decrease coverage?” With regard to your portfolio, has your risk tolerance changed since you last confirmed it? Of course, risk appetite is personal, so it’s important that you are comfortable with the risks you are taking.

Has Anything Changed That Will Impact My Planning for the Future? 
As life evolves, your plans will likely shift as well. Changes to your family, employment, or priorities all provide good opportunities to reflect on how best to move forward with purpose. Sometimes we see these changes coming, but often times we don’t. When these changes do occur, regardless of whether they were expected or unexpected, it’s a great opportunity to review your financial plan. 

We’re Here to Help! 
If you are approaching a big life or financial transition, by thoroughly answering the above questions, you can help to ensure the transition to your next phase is a successful one. Feel free to reach out to our team if you’d like some help getting started.