“How do I manage my finances during a major life transition?”
Life Transitions Create Big Emotions
When life changes, our emotions go up. And money usually increases the stress we are already feeling! Changes include:
Money usually increases the drama of things! Importantly, the stress is real whether the transition is positive or negative.
Here are three big tips for managing your money during life transitions.
Decision Free Zone
First, set aside any sort of urgency you may feel about your finances. Unless you have an immediate bill to pay or other decision that is forced upon you, defer. Choose to do it later.
Focus on you. This is a time to figure out what you have. Look back at where you have been. Look at the history. Consider writing it down. Often the first best thing we can do during a transition is to do nothing. At least, for busy people, it may feel like nothing. But in fact, you are focusing on you. You are laying the groundwork to make big decisions in the near future.
The decision-free zone is a rare gift you give yourself. Take advantage of it. Again, it is often easier to focus on the past than the future. Once you have the energy, free yourself up for the next step.
Envision the Future
Make space and time to think about where you want to be in 2 years, 5 years, 10 years or more. With a negative transition, the future may seem daunting. Or, perhaps a positive life transition has sparked your imagination.
During your decision-free zone, feel free to dream big. Let yourself envision a happier, more fulfilled version of yourself. Again, writing things down helps. Talking with people you love helps. Some transitions prohibit conversations with other people. If you have a major financial windfall, you may fear losing your friends. If you have a negative transition in life, perhaps you are prohibited from speaking about it for legal reasons. When you are ready to speak, then you are ready for the next step.
Find a Team
During a life transition, there is work that only we can do. There is work that we can outsource. We need time to focus on the work that only we can do. Offload the work that you can to other people you trust. This work usually includes the investment advice. The legal work should be done by a legal person, and the accounting should be done by a CPA. A team of experts makes all the difference during transition times.
Download “What to do when a loved one dies.”
In Conclusion
The ideas here are just a beginning. To read more, visit our Life Transitions page on the website. Contact your financial advisor. Listen to one of our podcasts or watch one of our videos. We are here for you!
Learn More:
Life Transitions & Money – Frequently Asked Questions
1. What are some examples of major life transitions that impact finances?
Common transitions include job changes, retirement, divorce, death of a loved one, selling a business, marriage, receiving an inheritance, or children leaving home. Each of these events can bring emotional and financial complexity, requiring thoughtful planning and support.
2. How long should I wait before making big financial decisions after a life event?
There’s no universal timeline, but giving yourself six months to a year or longer to regain emotional clarity can make a big difference. Focus first on urgent needs (like paying essential bills), then revisit long-term decisions once you feel more stable and supported.
3. Who should I talk to when going through a major financial transition?
Build a team. Financial advisors, CPAs, estate attorneys, and even therapists can all play valuable roles. Surrounding yourself with trusted professionals can help you manage the complexity while giving you space to focus on your own healing and next steps.
4. What’s the first financial step I should take after losing a loved one?
Start by gathering key financial documents and creating a checklist of immediate tasks like notifying institutions, locating the will, and securing assets. If you’re not sure where to begin, download our free resource: “What to do when a loved one dies.”
Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as financial or legal advice. Please consult with a qualified professional for advice regarding your specific situation.
DISCLOSURE: Client stories included in this blog reflect hypothetical client situations that represent those commonly encountered by AIWM representatives.
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