6 Transitions That Trigger Financial Transactions

6 Transitions That Trigger Financial Transactions

Many of us are no strangers to change. Things change all the time. We change our clothes everyday. Our sheets every week or two. Our hairstyles or cut every month. Our car every few years.


As a woman, new mother and entrepreneur, I find myself experiencing transition all the time. No matter how big or small, there is a shift in my world everyday.  I could be gaining weight or losing it, heavily relied upon by my son or less necessary as he gains more independence, refining my business model or changing my target market, making less money and spending more of it… Some transitions tend to take time to complete, while others may start and end right before my eyes. Not only do such transitions happen and require time and energy, they usually require some financial transaction as well. I have yet to experience a transition that didnt come with some financial transaction. As I have said before, “transitions bring transactions.”


I have recalled six transitions in particular, from personal and client experiences, that have been rather common and costly. By common, I mean these transitions happen to lots of people or they happen often in one’s life. Whether it’s a shared  or individual experience, I am sure you can relate to at least one of these and the financial transaction it triggers. The financial transactions can be negligible or devastating, depending on how financially prepared you are. My advice: consistently create your solid wealth foundation so as not to jeopardize the health of your financial life when you experience a transition.


Here are six transitions, with descriptions of the transactions and ways to mediate the costs:


1.  Leave your 9-to-5 to become an entrepreneur/business owner. There are so many factors to consider when you want to step out on your own and take the ultimate leap of faith. Saving your money is and should be your top priority. Use the income from your current job/career to create a “Leap of Faith” fund. This way when you do step out on your own, you have some funds to get started with. Keep this separate from any other savings you have.

2.  Become a mother. When you receive the exciting news that you are expecting your very first child, thousands of things run through your head, including how you’re going to afford a child. If it is not your first child you may have some learned lessons and insights from the first child. But regardless, you want to be sure that you have stable income and significant savings. If you were unable to work and provide for you and your child(ren), would you be ok? Again, the priority here is savings along with security. Some of your emergency funds should include this life event.

3.  Laid-off or about to be laid-off. I have experienced two layoffs that ultimately, I saw coming, but hadn’t prepared for them explicitly, although I wish I had. Some say that is what your emergency savings is for and I agree, but it should be a bit more that goes into this planning. There are more than monetary costs to consider. There is the emotional and professional costs as well. Getting laid off can be a turning point in your career. It could also impact your self-esteem and worth. So, be sure to keep this life event high in priority, when it comes to planning your resources. The more money you have socked away to get you by during the layoff, the less stressed you’ll be about money and surviving, as well as about finding a job. You may be able to free up for a bit and take vacation. I did ;)

4.  Separation of business and personal funds. When you do become a business owner or entrepreneur and you don’t separate your business from your personal, you can create some financial chaos, particularly, for tax purposes. However, even for basic money management principles, when you don’t prepare properly, you spend more later, trying to get it right. Whether its for hiring CPA’s, accountants or bookkeepers. Start off on the right note and get someone on your team, to do a quarterly review at minimum, especially if you can’t afford a full-time professional. Purchase an accounting software to do it yourself. Just don’t go it alone.

5.  Become a master of your money versus a slave. There are moments in our financial lives when we’ve had it. Enough is enough and we are ready to turn things around. To gain control of our money. To reign in on our irresponsible financial behavior. Well, most times, its during a crisis. It’s when it all hit the fan already. And at this point, this is is when the transition is most costly because you’re cleaning up. Most times you see the most outflow towards this transition, upfront and at once, because situations require professionals to come in and do what they do. However, if you forego a professional clean-up, you run the risk of higher costs doing it yourself. Cut your losses and hire someone.

6.  Juggle too much and focus on too little. I am beyond guilty of this. We tend to get ourselves involved in things, groups, activities, projects, associations, or commitments that cost money, but then we don’t take full advantage. We sign up for monthly this and that, and then forget to cancel or unsubscribe. We spread ourselves so thin that in the end, something suffers, because we just don’t have anything left. That’s when we start to transition into the overwhelmed space, the anxious space, the “ I gotta get some control” spce. All the while, money is being wasted. Gone down the drain. Can’t get it back. I suggest that once a month, once you finish budgeting, to review the expenses associated with monthly fees and ensure you’re taking advantage of them, if not, cancel. Check your accounts for automatic debits that you setup and have forgotten to cancel. Believe me, you’ll be so happy in the end.

Do you relate to any of these transitions? Have your finances been impacted by a recent transition? Maybe one not listed here? If so, share with us. We love to learn from each other. After all, isn’t that why you’re reading this post, to learn something new? Continue the learning, and join a community of money masters and wealth builders. Articles like this, strategies and solutions, news and information are shared to help you along your wealth building journey.

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Dr. Dominique' N. Reese
Dr. Dominique’ Reese, owner of Reese Financial Services and creator of Master My Money, is a personal finance expert, coach & strategist, speaker, educator, author, blogger, and consultant with 10+ years experience in the financial services industry.