The Winter is half over and we're all bundled under blankets on our couches here in the Midwest. The snow falls outside, and it creates a calming scene. I love snow. I think it's beautiful. But added to that calm is some nervousness. We have our first baby on the way, due the second half of February. That definitely adds lack of clarity, as we wait to see if she is healthy and if the remainder of the pregnancy goes well.
Major life events like this are a perfect chance to reevaluate things. I've already made career changes, health and life insurance changes, savings habit changes, and am building another bathroom in the house. But this reminds me that it is a perfect time to talk about it with you.
Whether you are working with a financial advisor, or not, any time you have a major life change that will affect your finances, it is a legit reason to also change budgetary/spending habits. So for example, we chose a different health insurance plan that has a lower max out-of-pocket limit. We have spent a few days determining which of our insurances to put our daughter under as well. I have also decided on a savings plan for her so that college costs are more bearable in 18 years.
Whether it is a baby in your life, or a new home purchase, or graduating from medical school with $200k in debt, or getting your first attending physician job, you should take time to re-evaluate. Ideally you already have a financial plan and budget in place.
So if you have a budget in place, and you save 20%; put 15% towards debt repayment; put 50% towards expenses/necessities; and then have 15% for what I call dining/culture, you can just tweak those percentages to fit new expenses or saving requirements. It is not a difficult thing. I've done it for many clients in the past.
So just keep cognizant that you need to plan and budget, and when there is a major change, your plan/budget must change with it.
On a different note, I want to make some changes to my blog. I think in addition to ideas about saving, budgeting, and passive income, I will begin reviewing books that are kind of self-help/performance/finance related. I think I can save you some reading time, by giving you the key points. I may not produce a review a week, with the baby on the way, but look out for these book reviews because I think they will be helpful.
I am a Chicago-area financial adviser to young doctors & business owners.