How to plan for both financial goals and setbacks

How to plan for both financial goals and setbacks

“That’s the power of having a plan in place: You can see what’s on the horizon,” she said. “Not stumbling on it can make a big difference.”

As part of your plan, assess how a big life change could influence cash flow and expenses, said Janet Stanzak, a certified financial planner and principal of Financial Empowerment LLC in Bloomington, Minnesota. That can help you strategize on ways to financially prepare.

For example, having a child might entail reduced income depending on your employer’s maternity-leave policy, at the same time you need to find room in your budget for diapers, gear and other child-related bills. Switching jobs might boost your salary but could leave you juggling two mortgages in a relocation or result in other financial losses during the transition, she said.

And first-time homebuyers often neglect to budget in line items like property-tax increases, insurance and unexpected maintenance or repairs.

“Those are the things that sink us, if we’re not prepared for it,” Stanzak said.

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