Financial planning tips for any major life changes in 2025

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A new year often represents more than just flipping the page on the calendar. For many, it can signal the beginning of a major life change. Whether 2025 is the year you plan to get married, switch careers, retire, relocate, expand your family or undertake another significant change, navigating a major transition can feel like trying to find your way through a maze blindfolded. To ensure a smoother transition, it’s crucial to incorporate financial planning into your preparations.

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Assess your financial situation

Before making any significant move, it’s vital to evaluate your current financial situation. Take a careful look at your income, expenses, savings, debts, and long-term investments. Depending on the type of change you’re considering, assess how each aspect of your finances will be impacted. For instance, if you’re contemplating a new job, consider how your new income and benefits will affect your daily expenses and your ability to save for the future. An increase in income could accelerate debt repayment, allowing you to pursue other financial goals more quickly.

If you’re planning to retire, travel, return to school, or make a change that will significantly increase your monthly expenses, create a budget based on your projected income and expenses. This will help you determine whether the change is feasible given your lifestyle expectations. Having a clear financial outline will enable you to make informed decisions, as money may not buy happiness, but its absence can certainly make a transition more challenging.

Maintain flexibility

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Life rarely unfolds exactly as planned, and flexibility, both mentally and financially, is key, especially when your plans depend on external factors. For instance, when buying a home, there could be delays in the mortgage application process despite your timely submission of documents. If you’re planning to travel, visa processing might take longer than expected. Similarly, when applying to return to school, there could be delays as the institution evaluates your previous credentials to grant credit for prerequisites. In other situations, medical or legal matters may cause unforeseen delays.

When faced with circumstances beyond your control, maintain your sanity by being prepared to adapt and adjust your plans as unexpected challenges arise.

Set realistic expectations

Setting realistic expectations is also important when you’re navigating significant life changes. By managing your own expectations as well as those of others involved, you can maintain a sense of peace and stability. Substantial changes often take time to come to fruition, and keeping realistic expectations in mind can alleviate stress and prevent disappointment when things don’t happen on your expected schedule.

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One effective way to maintain your peace of mind during a transition is to stay organized. This involves keeping important documents, contacts, and plans in order. A well-organized system can significantly reduce stress by ensuring that you have everything you need when you need it. For example, if you’re moving house, create a checklist of tasks and deadlines, and keep all related documents (like lease agreements, moving company contracts and utility setup information) in one accessible place.

Additionally, maintaining a journal or diary of your experiences can be incredibly therapeutic. Writing down your thoughts, feelings, and progress allows you to reflect on your journey, gain valuable insights, and track your achievements. This practice can provide a sense of accomplishment as you look back and see how far you’ve come, especially during challenging times. It can also serve as a useful record for future reference. For instance, if you’re going through a career change, you can note down what strategies worked best, what challenges you faced, and how you overcame them. This can be helpful if you or someone you mentor faces a similar situation in the future.

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It’s also essential to set realistic expectations regarding your finances. Major life changes often come with unexpected costs, so it’s crucial to plan and budget accordingly. Estimate your expenses and factor in potential emergencies or delays that could impact your financial situation. For example, if you’re leaving your job to join a partner overseas for a temporary assignment, ensure that you have sufficient savings to get by on only one income until you’re able to look for work. This is especially important if you’ll be maintaining financial commitments at home while living abroad.

By being realistic about your finances, you can create a budget that accommodates your needs and reduces the risk of financial stress. This proactive approach will help you feel more secure and prepared as you navigate your life transition.

Navigating significant life transitions can be both exhilarating and daunting. By setting realistic expectations both personally and financially, staying organized, and maintaining flexibility, you’ll be better equipped to handle the inevitable ups and downs that accompany major life changes. These practices can also help you stay grounded, reduce stress, and maintain a positive outlook as you move forward into new chapters of your life.

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Remember to prioritize your health and wellbeing, seek support from loved ones, and celebrate your progress along the way. Embrace the opportunities for growth and transformation that come with life transitions and take each step with confidence. May your journey ahead be successful and fulfilling!

Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for more than 28 years.

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