Chapter 14
Budgeting for Major Life Changes
IN THIS CHAPTER
Navigating job loss
Facing a chronic illness or short-term disability
Organizing your estate plan
I had several teachers obsessed with telling me to “prepare for the worst and hope for the best” in high school. I wasn’t always ready for a test, but when I was, the joke was on them. Can you imagine how I acted when I got an A?
The truth is, you may not always be ready for the worst. That’s how debt happens. That’s why you save an emergency fund and then save additional money in a sinking fund for ongoing expenses, like car maintenance. No one wakes up one day saying, “I think I’ll blow a tire out on the freeway,” but you still put money aside for it. (You can read more about emergency and sinking funds in Chapter 8.)
You can use your budget to prepare for the worst while hoping for the best. Losing a job, losing your health, and losing a loved one are some of the worst scenarios I can think of. In this chapter, I walk you through how to handle some difficult life-changing events that can affect your and your loved ones’ financial stability. I hope you never need to use this info, but I want you to have it just in case. ...
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