Throughout your lifetime, you may face a variety of personal financial issues. Issues like debt, unemployment, illness, and other unexpected life events can affect you rather harshly. However, if you can set aside time to create a financial plan, usually there are ways to deal with almost every single financial issue that comes your way.

Let’s look at a few of the common issues that many people experience throughout their lifetime. 

Unemployment – At some point in life, everyone starts off as unemployed but many of us have the backing of parents, relatives, or friends to help us through until we get gainful employment. But for those who don’t have support, excessive debt can often occur if there’s no plan. This is especially true if you had a good job and then were laid off due to no fault of your own. Losing your job, savings, and then building up debt due to the unemployment situation, is a common problem especially now that the workforce is shrinking. 

Underemployment – Many people find jobs, but they don’t pay enough for necessities in their location. For example, if your job only pays $35,000 a year but housing in your area costs $24,000 a year, you may experience some difficulties covering housing costs and taking care of basic needs. 

Accident or Illness – Whether you were born with an illness or came down with one, it can have a huge financial impact on you and your loved ones, especially if you don’t have critical illness coverage and you depend on your job to provide you with affordable medication coverage. Every year some people have to file for bankruptcy due to medical situations that prevent them from working. 

Going Out on Your Own – When you first decide to “go out on your own” as a young adult, it can be quite shocking to find out how much everything costs. You may quickly realize that you need to downgrade your spending and expectations because you’re not able to live at the same level you were accustomed to while living with your parents. 

Having Children – Children are God’s blessings to every family and having them is necessary to ensure that our genes carry on and don’t become extinct but they are very costly. Statistics show that it costs on average $250K to raise a child to age 18, which does not include college tuition. Depending on the career they pursue and the role you play in safeguarding their tuition, they could cost you more than $350K by the time they finish college. 

Divorce – Not only does divorce cost money just to file the papers and pay the lawyers, there is a long-term cost to the entire family that may not have been considered. Of course, no one wants to imagine “what if” when they’re in love and planning a wedding. But divorce has real consequences and real costs that can add up for the long term for a family and the heirs of that family. 

Death – Whether it’s your child, parent, or partner who dies, death has many financial consequences. From unpaid debts of the deceased to probate court, and settling an estate, the financial responsibility can be sizable. How badly a death affects you financially depends completely on how well you and family members planned for it. 

Retirement – Everyone hopes to retire someday. But sadly, one in three Canadians have no retirement savings. In the past, retirement was a lot nicer for most retirees due to defined benefit pension plans and a lower cost of living. However, the lack of availability of defined benefit pension plans, the high cost of living, and the minimal increases in government benefits, will create some financial stress for many people who plan to retire in the next 5 to 10 years because they have less time to make up for their failure to plan for retirement. 

Consumerism – Getting caught up in buying more to “keep up with the Joneses” is a huge problem for many people in society. If you can control your consumerism and consumer debt (credit card debt), you will likely be a lot better off than your peers, even if you don’t earn as much as they do. Remember the secret to financial security is not about earning more, it’s about how much of what you earn you keep. 

Every one of these issues that you may face in your life can be mitigated by good planning. Even if you’re in a bad situation now due to poor planning – potentially due to lack of knowledge about personal finance, it can still be fixed with a good plan going forward.  

There are several different steps that you can take to manage your personal finances and I’ve covered some of them in previous blogs. However, I’m sharing the list below with some key ones that, if followed, could significantly help you to manage some of the financial issues that you may face throughout your life.

  1. Develop a Budget
  2. Create an Emergency Fund
  3. Avoid Consumer Debt 
  4. Plan and Save for Your Retirement
  5. Plan and Save for Your Children’s Education
  6. Plan and Set Financial Goals With Your Family
  7. Live Within Your Means (or Expand Your Means)
  8. Use a Debt Roll Up Strategy To pay off debt faster
  9. Commit to Being Financially Literate
  10. Discuss Financial Matters at The Dinner Table Regularly

No matter where you are right now, you can manage your personal finances like a pro. All it takes is some understanding of how to go about it, and commitment to improving where you are lacking. Even if you’re working with a small budget, when you are realistic about your situation and truthful with yourself, you can come up with a financial plan that will work for your needs and that of your loved ones.