How to Prepare for a Financial Transition

First things first - I finally got my own domain!!! Yesssss! I'm finally a real blogger now! If you can please update your links to http://www.fromshoppingtosaving.com, I'd greatly appreciate it. :) The blogspot address will still redirect you to the new address though. My Alexa ranking is gone now, but it still shows my blogspot Alexa ranking on the side with the widget. Not sure how this works. To celebrate the new(ish) domain, I created a new header. I obviously had too much time this weekend and played around with Photoshop for a bit. Let me know if it's too annoying and I will try something else.

Now onto my post... 

I have a really hard time dealing with change. I’m not sure if it’s because I’m a naturally emotional person and I get attached too quickly, but this always happens. The funny part is that the only consistent thing in my life has been change. I’m sure you can all agree and have heard this phrase before.

Once I get comfortable in a certain situation, I get so attached that it becomes hard for me to leave. Whether I’m leaving family, friends, boyfriend, a school, a certain class with a good professor, a job, a living situation, a city…I always have trouble saying good-bye, and it almost always involves crying. You’d think I was used to this by now, but nope – every time I have to say good-bye, a wave of sadness hits me hard.

Since I’ll be quitting my job soon and leaving my BF in lieu for a long distance relationship and a brand new start at a new school, I’m finally delving into preparation for this huge transition in my life. Since I can’t really prepare myself for the emotional toll this change is going to take on me, I want to make sure that my financial priorities are still under control and that I am fully prepared to deal with them.

I initially wrote this up as what I need to do to prepare for my future financial transition, but I decided that this applies to everyone and I have made this into a more general guide to dealing with a financial transition – we all go through them, although you may not realize it! 

I’m defining a financial transition as a new change that occurs and directly affects the way you handle your finances.

Whether you are dealing with extra income, a pay raise, a new job, a baby, funneling savings into a new fund, or buying a new item, we all have to transition into that new situation smoothly.

Here are some tips that will help prepare you for a financial transition (including my analysis of my financial transition):

Evaluate: Seriously evaluate the situation. What will the effects this transition will have on you, your other goals, and your future goals?

Quitting my job and living with my parents again is something that I think about all the time. In fact, it doesn't leave my brain ever. BF and I talk about this a lot and I think that as long as we're talking about it and we are still in agreement with our future goals, everything should be fine. We are both in agreement that this change is for the best, and it will help both of our futures.

Prioritize: Now that you know what you’re up against, try to prioritize what’s important to you. With transitions, there’s usually something new that pops up and interrupts the normal flow of how things work.

For me, saving for retirement and saving is still a huge goal that I do not want to lose sight of. I will be taking out the minimum amount of loans, and I will be living frugally to stay on course. My relationship is also another priority, and we have talked about how we will deal with the change. BF knows that school is #1 so I'm glad he understands, but I think we will have to communicate more in-depth about how I may not get to talk to him sometimes or see him as often as I'd like.

Negotiate: I added this in here because negotiating is important in anything we do, whether it’s to lower your APR rate on a credit card or to do what I did and ask for something (in my case, scholarship money, but it can be anything really). I think negotiating is crucial in daily life and something we should all remember to do to make sure we are getting the best deal/offer.

I've been negotiating for scholarship money from the school and I am in the middle of another negotiation with them. My next step is to research private loans and compare them to the federal loans that I am being offered. I'll see if I can do any negotiating in this aspect. Other items that I've been negotiating includes parental assistance...I'll get to that on another post. I'm pretty excited about it.

Take Advantage of Assistance: Assess your resources and think of what this new change will bring with it. Sometimes we forget that we have a lot of help out there that is waiting for us to jump in and utilize it. New job? Check out the benefits and voluntary benefits you can participate in. New school? Check out the resources they offer like free gym access and reduced health insurance.

I've already looked into the health insurance offered by the school since I'll be losing my work benefits. My mom also offered to add me to her insurance through her work, so I'll be covered until I'm 26. That leaves one more year and I think that I will take the school's health insurance for my last year of law school. The school also has great resources such as access to their gym facility.

Build a System: We’re wayyyy ahead of the game at this point. You’re prepared and you know what this change will bring with it. It’s time to devise a plan of attack for when this change hits you, or if it already has – now is the time to draw out a plan to deal with it. If you have extra income, time to disburse it into your budget. If you have a new baby, time to budget in those costs or prepare for baby’s future with an education fund. Whatever the change may be that brought you to this financial transition, this step is important for your future financial well-being.

I'll do a separate blog post on this but I have already begun on my frugal student budget that I will be really strict with once I start school. I'm also selling items to make sure that my emergency fund is maxed out to the fullest it can be at this point. I will also be looking into my bank account to make sure that I won't get hit with any minimum balance fees, and I need to stop automatic contributions to my roth IRA. I'm keeping all of retirement money in there though because I want to get back to saving for retirement right away when I graduate.

Stay Active: Something that I always have to remember is that I can’t just “set it and forget it” (unless I’m automating my finances or something). Don’t let all the planning ahead go to waste! I think this is where a lot of us get stuck in a rut. We sometimes fail to remember why we put so much thought and effort into this new system. Just stay active in whatever it was you were prepping for.

Be Flexible: Know that this plan isn’t set in stone. We’re already dealing with the financial transition so you may have missed something or again, things may change. Lots of unexpected events can happen and it’s okay. Just say to yourself, “I got this!” because you do. Maybe this applies to me moreso than others haha but I just have to remind myself to be flexible.

Know Your Roots (aka The Big Picture): This last one sounds silly but it’s important to stay true to who you are. Although change brings something fresh and new, don’t stray off too far. Know what your goals are and make sure you are staying aligned with these goals. Focus on the big picture and find a way for this new change to supplement your current life.

These last three items are all on my list of stuff to remember when I make the transition. I'd like to think that I'm always thinking about the bigger picture since I think of my future a lot. I'm not sure how I'll react to new changes, but I will remember to try to stay flexible and active in making good choices.

Has anyone else been through a financial transition or is anyone anticipating one? Did you implement these steps?


Post a Comment

Thanks for the feedback!

Related Posts Plugin for WordPress, Blogger...