6 Reasons to Update Your Financial Plan Now

September 22, 2015

Connect Member

Empowering savvy women to become the CFO of their lives via proactive planning & wealth management.


You have may have already mapped out your financial plan for the future or even worked with a financial planner to help you achieve your long-term financial goals. But have you accounted for any big life changes since you first did this? We all have a lot of important experiences during the course of our lives, and there are certain ones that affect us financially as well. To be successful in achieving your economic goals, you need to revisit your financial plan when one of these occurs.

Here are six life experiences that are cause for an update:

1. Marriage

Now that you are sharing your life and financial responsibilities with someone else, you need to update your financial plan. For various reasons, we sometimes have the tendency to not want to talk with our significant other about financial matters. It is important that you both have an understanding of the family finances and be able to set goals as a couple. Either of you should be able to step in and be knowledgeable about everything from the monthly budget to insurance and investments.

2. Divorce

Divorce can be a difficult time not only emotionally, but also when it comes to finances. Whether you are trying to maintain your financial situation or are getting back on your feet, there are some key areas of your financial plan that need updating:

  • Know where you stand financially. Before you can move forward financially, you need to organize and understand your expenses, savings, debt, etc.
  • Create a budget. You need to know what your income and expenses are to keep your spending under control.
  • Review credit reports. You want to know what is on your credit report and you need to make sure that you have credit in your name.
  • Have an emergency fund. Since your household income has dropped, you need to build a cushion for emergencies.
  • Update your estate plan. Remember to update your will or trust and any beneficiary designations.

3. Children

Adding children to your family is exciting. Whether you're expecting, thinking about adoption, or building a blended family, you need to plan for the added expenses. According to the 2014 U.S. Department of Agriculture statistics, the typical middle-income family will spend, on average, $245,340 to raise a child born in 2013 until they are 17 years old.

You may now need to revise your budget to accommodate expenses such as childcare or to allow one parent to stay home. You also need to review your insurance policies and estate plan to make sure your family is protected. You may also want to reallocate resources to start funding your child’s college education.

4. Career or Job Change

Whether you have experienced the loss of a job or are considering accepting a new job offer, it is a good time to talk with your financial planner about your key financial concerns.

Losing a job can be stressful but doesn’t have to be financially devastating. Whether you were unemployed due to termination, merger, or layoff, the key financial concerns include loss of income, medical, and other benefits. Decide how you will deal with these going forward until a new job is secured.

You may be currently employed but considering a career or job change. You want to consider how this new job will affect your current retirement plan or whether or not the benefit package is sufficient to meet your family’s needs.  

5. Retirement

Retirement can be one of the most rewarding stages of your life. Unfortunately, if you don’t plan properly, you can run the risk of not living the retirement you envisioned. This is a good time to meet with a financial planner to update the answer to these key questions:

  • When do I plan to retire?
  • How long will I spend in retirement?
  • What are my sources of income?
  • What are my expenses?
  • How much have I saved?
  • How long will my money last?

6. Death of a Spouse

Dealing with the death of a spouse can be overwhelming, both emotionally and financially. You will need to compile a list of tasks and issues that will need to be addressed. Your financial planner, along with your estate planning attorney, can help you through this process.

A financial plan is not a static document. It should be reviewed and updated on an annual basis and/or as your goals change. It is also important that you revisit and update your plan when your have major life changes. If you have had one of these major life changes recently, now is a good time to schedule a meeting with your CERTIFIED FINANCIAL PLANNER™ professional to update your plan.

Pamela Plick is a member of the DailyWorth Connect program. Read more about the program here.