“When money changes, life changes, and, when life changes, money changes.” Susan Bradley

Your money and your life are linked.

As we move through life, we all experience transitions. For many, these have been referred to as milestones, but as the goals keep shifting, and we live in a world increasingly tailored to our personal choices – we cannot escape the reality that our life choices affect our financial situations; and they can’t be unlinked!

Here are four major life transitions that we need to include in our financial planning:

  1. Marriage (or partnering)
  2. Parenting
  3. Divorce
  4. Selling a business

For richer or poorer, money is a key spark in couple conflict. In the article: “Marriage Matters: Copping a ‘habitude’”, James and Audora Burg shed light on how this is actually driven by the underlying habits and attitudes, or “habitudes,” towards money and how to uncover what these are in order to achieve a successful marriage – both emotionally and financially.  

Similarly, in parenting, divorce and in selling a business, it is evident that emotions and finance are inextricably linked. 

An article in The New York Times by Dani Blum, explores: 5 Big Myths About Money and Parenting, wherein she debunks: “Myth 5. Being financially ready to start a family is more important than being emotionally ready.” Showing instead that: “Making sure you’re emotionally ready to have children may be just as – if not more – important than having a certain amount tucked away in a savings account.”

Divorce, no doubt, entails a shift not only financially but also emotionally, and selling a business, perhaps more surprisingly so. Despite (a possibly substantial) financial compensation, it is just as important to prepare for the emotional journey (and sense of loss) after the sale of a business as in any other major life transition.

All major life transitions are accompanied by a period of emotional intensity as one way of life ends to make way for another. The adjustment can be difficult, especially if it does not meet our expectations of how we thought our life would be. With it inevitably comes some kind of chaos, confusion, uncertainty, fear, fatigue and/or feeling of hopelessness.

On the other hand, there are new possibilities, which can bring hope, energy and resilience. It is not uncommon for emotions to fluctuate between these extremes of distress and euphoria.

It is not always a choice that brings about these transitions – they can be chosen or imposed, welcomed or unwelcomed, expected or unexpected, sudden or gradual. This, together with the emotional intensity, makes it vital to do the groundwork and have plans in place ahead of time, both on a financial level and emotionally.     

Level-headed thinking is seldom possible during times of transition, which is when decisions need to be made. The easiest way to throw off your financial plan is to make a rash, emotional decision during times of difficulty. Considering transitions and how they may affect us ahead of time is a constructive way to bring more intention to our choices.

At WellsFaber, we believe that your wealth and emotional life should be in balance. We strive to help you move through the many changes in life through the acceptance of uncertainty and to avoid reacting – or overreacting – by creating a more proactive mindset about your financial future. Let us work together towards this to achieve a wealth/life balance.