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How To Get Your Finances in Order
Before a Major Life Change

See also: Budgeting Skills

So, you’ve got a major life change coming up?

Maybe you’re:

  • Buying your first home
  • Moving abroad
  • Starting a new job
  • Moving in with a partner

Whatever it is, you want to get your finances in order well beforehand and ensure you’re not dealing with money troubles as you navigate through this transition.

The last things you want on your mind are bill disputes and old notices coming through the mailbox. Unfortunately, doing so is about as hard as you’d expect.

But that doesn’t mean you should just wing it and go in without even a cursory glance at your bank account. Getting your finances in order before your life shifts dramatically is essential and in this article we hope to show you just how to do it.

Pile of tax forms and calculator.

Create a budget (and stick to it)

A budget is like a diet for your wallet. They’re no fun, hard to stick to and it’s not always immediately obvious they’re working.

The thing is that you have to really commit. And if you do, a budget will help set you up for financial security and awareness for years.

If you aren’t keeping track of where your money is going and where it should be going, you can quickly lose control of both your spending and your future.

The key to a good budget is to make it realistic so that you can actually stick to it. We have a great guide to budgeting so that you can identify and cut out bad spending habits without sacrificing everything you enjoy in life.

Budgeting does not mean depriving yourself of your hobbies, health or indulgences. You just have to be honest with yourself and learn to turn those things you love into little treats, if only temporarily. Without a budget, your major life change is only a pipe dream.

Turn to professional help

There’s a misconception about personal finance that it’s something you need to do alone.

You picture yourself at the kitchen table, a pile full of bills and a calculator in front of you. You’re stressed, confused and ultimately getting nowhere. It doesn’t have to be like this though.

Whatever major life change you’re gearing up to, professional help can ensure you’re in the right financial situation. Sure, it might take some light investment, but it’ll be worth it to understand where you’re making mistakes in your budget and how you can acquire funding from other sources.

Say you’re moving to Ontario and want to buy a house. You shouldn’t put all that work into finding a mortgage and understanding it by yourself. Use Breezeful to find Kingston brokers (or other services) to lean on for financial advice related to the area and find the best possible deal. You can’t secure this alone, so make use of the advice available at your fingertips.

Use digital tools (but only ones that work for you)

Struggling with that magic tool a friend recommended? It’s not because you’re bad at finance, it’s just not for you!

Yes, digital tools are a brilliant way of monitoring your finances and automating good habits, but they aren’t that one simple trick that’s going to help you stick to your budget overnight.

While it might be true that there’s an app for everything, you might not need an app for everything. You might just need a banking app that allows you to quickly move cash between accounts or save small change incrementally. If that’s the case don’t sign up for every hot app under the sun, just pick the ones that fit your current situation and, more importantly, your goals.

Some common tools you might want to consider are:

  • An online banking app

  • Expenses trackers (Mint is a popular one at present)

  • Receipt scanners and storers

  • Coupon apps (to help you find great deals)

Downloading an app won’t make you realize your goal, but it’ll make doing so that little bit easier.

Take credit seriously

Not all major life choices require you to have a good credit score. But a good credit score will always come in handy and, if you don’t keep track of it, it can surprise you when you least expect it.

Buying property, in particular, will require you to have a good score. The better your credit score, the more likely a bank is to lend you money.

You can use a credit score checker to see your current rating. To improve it, however, you can focus on the following:

  • Paying bills and debts on time (try and set up standing orders where possible)

  • Closing old inactive accounts with banks

  • Avoiding additional credit applications

  • Staying out of your overdraft

Credit works in tandem with other forms of financial security, such as job consistency. By keeping track of it you’ll notice gaps in your financial history that you can work on in the present.

Have an emergency fund in reserve

It’s always worth having something in reserve for a rainy day.

Part of getting your finances in order is preparing for the worse. You might see it as negative thinking, and those extra few months of saving might push back your plans, but you never know when something is going to pop up out of the blue and scupper your plans. The best way to avoid that is to have some extra change to fall back on.

An emergency fund of about 10-15% of your overall goal will offer an extra security blanket during tough times. Say you’re buying a house and realise it needs a little bit more work than originally expected. Having that emergency fund solves that problem immediately, rather than letting it turn into something that blights your first few months there or forces you to pull out of the purchase entirely.

As straightforward as your plan might seem, life changes are unpredictable. Make sure you’ve thought of everything before diving in.

Nobody wants to think too hard about their finances, especially when you’ve got something exciting, challenging and utterly different emerging on the horizon.

But, as we all know, it’s essential for securing our dream futures and surviving testing times. These tips will help you start to get your finances in order. You just have to stick to them.

About the Author

Ade Labinjo is co-founder of Breezeful, an online mortgage broker based in Canada. In seconds Breezeful negotiates on your behalf with hundreds of lenders to get you the right mortgage online.