MONEY MATTERS: Don't let times of trouble reduce your finances to rubble

Major life events demand major financial decisions. But avoid financial actions until any turmoil has subsided.

The most common and important life events include starting or ending a relationship; starting or losing a job; experiencing a birth or death in the family; buying or selling a home and the accompanying moving; receiving an inheritance, lottery or other major windfall.

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All such events trigger stress and emotions, positive or negative, and that can affect your ability to make sound financial decisions.

Many of these events, especially births and deaths, can attract salespeople in the financial, real estate and automobile fields, who read announcements to find potential customers for their goods and services.

 By all means look at information they provide. But avoid buying or signing anything until your life returns to normal.

A job loss could bring with it a severance payment. As with any other windfall, you should wait for the euphoria to subside before deciding what to do with the money.

Starting a new job or getting a promotion/raise both bring excitement, perhaps apprehension. Allow those emotions to settle, then turn to the dollar decisions you need to make.

Relationship developments also demand financial decisions. Once again, allow any happy, angry or sad emotions to subside. Then do your research and consult with the relevant experts.

Buying and selling a home involves one of the largest financial transactions most people will experience. But wait until the dust has settled – perhaps literally as well as figuratively – before you make any further commitments.

Gathering information and ideas makes sense. But avoid major decisions, especially those which tie you to irrevocable investments.

If in doubt, stay with cash.

And beware those, even the most well-intentioned individuals like family, friends or advisors, who seek to convince or pressure you to take action.

Bottom line: Don’t make financial moves during times of personal turmoil. But once you can think clearly, do review your finances and take the necessary actions.

Mike Grenby is a columnist and independent personal financial advisor; he’ll answer questions in this column as space allows but cannot reply personally - email

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