Personal Finance Revaluation – The New York Times



If you are thinking of changing careers, starting your own business, or making some other important life change, there may be financial costs, at least in the short term. At the very least, “you should have a spreadsheet of the bills and things you need to cover no matter how the business or sideline goes,” Timmerman said. Try to have a good idea of ​​how many months your savings will be able to cover these bills, she said, or what you will be doing to pay them instead. It could mean selling a car or moving to less expensive apartments.

Whether you are dreaming of turning your pandemic into a new career and need to decide how to pay for it, or just want to feel like you have solid financial foundations, planners say that im In general, three major financial areas are to be assessed first.

“If someone has an emergency fund, doesn’t have high-interest debt, and is saving a decent amount for retirement, they’re in a good position to make big changes,” said Brian Walsh, senior manager of financial planning at SoFi, an online lending company. “If you haven’t ticked these boxes, you should be more careful.”

BUILD AN EMERGENCY FUND In the past, planners have generally recommended that people spend three to six months in an emergency fund to get through difficult times. Some are now suggesting that the fund should keep you afloat for up to a year.

“Now the advice is even more conservative,” said Dan Herron, certified financial planner and co-founder of Elemental Wealth Advisors in San Luis Obispo, Calif. Isn’t the road getting worse? “

Your emergency fund should cover basic costs such as rent or mortgage payments, utilities, groceries, and transportation. You should also allow enough time to cover monthly health insurance and auto or homeowner (or renter) insurance, as well as credit card or other debt payments.

Whether your savings are healthy or you’re trying to sustain them, the same advice applies: set a monthly savings goal and stick to it. It is even better if you automatically withdraw the money from your bank account every month and have it deposited into your savings, retirement or brokerage account.



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