Budgeting during life transitions

One of the key lessons of personal finances is that having a budget helps you be intentional with your spending so that you can reach your financial goals. But what happens when you are going through a change in your life, and you don’t know how to budget for certain things?

Whether you are switching jobs, moving to a new location, transitioning from one car to two or to none, starting school, or adding a member of your family, it can often be difficult to know how to incorporate these changes into your budget.

The temptation is just to play it by ear or to throw out the budget for a while until you get a sense of what your new expenses will be. And while there is certainly some need for flexibility, I would argue that a more mindful approach is helpful — even if you aren’t sure exactly what dollar amounts to put into certain categories.

My story

In the past two years, the issue of how to budget during a life transition has come up quite a few times for our own family. First, I moved back to the US from Korea and gave birth to my son. Then, we moved as a family back to a different part of Korea. And currently, we are waiting to hear back about a career change opportunity for my husband. We’re also planning to get a car, although we aren’t sure when.