Life Events You Should Financially Prepare For in 2024

Life happens. However, you can make it happen or let it happen to you. If you let it happen to you, you will be battered left, right, and center. However, if you take charge and make it happen, you can steer it in your desired direction.

While you cannot control every life event, you can prepare for the foreseeable events. Preparing for these life events gives you control and makes your life easier.

In this article, we shall highlight some of the life events you should prepare for in 2024.

Read Also: 6 Family Events That Mess With Your Finances in a Big Way

Healthcare 

Health is one of the things that many tend not to think about until they are sick. You do not think about the inconvenience and uncomfortable feeling of a cold until you catch a cold. 

Whereas you do not want to think about unpleasant times in your life, such times don’t need to be more stressful because of a lack of preparedness. Planning for your healthcare is not being a prophet of doom rather it is being proactive.

One of the ways you can prepare yourself for such times is by living healthy. The simplest way to prevent disease is through your lifestyle. Ensure you eat healthy, exercise regularly, and have health checkups regularly.

Eating healthy might cost a little more. If you fancy, you can also commit by working with a nutritionist. Secondly, you might need to sign up for a gym and even have a personal trainer. The checkups might also cost some money. While these financial commitments might seem like a lot, they are nothing compared to dealing with massive hospital bills that you have to pay after you fall sick.

Being proactive about your health is the best way to prepare financially when it comes to healthcare.

On the other hand, you can take it a notch higher by having health insurance. Health insurance comes in handy when you or a loved one covered under the cover you subscribe to falls ill. Depending on the coverage, they also cater to different health services. 

You should carry out comprehensive research on the different insurance products in the market to find what suits you in terms of the health conditions you are predisposed to, the number of people you would like to have under your cover, and the amount in a monthly installment that you have to pay.

As the year starts, many people have “being healthy” as their New Year’s resolution. It is high time that you did not postpone your health, lived healthy, and prepared for unforeseen health challenges.

Read Also: 6 Financial Steps to Take When Making a Big Life Change

Investment Planning

If you saved Ksh1,000 every month for the next 30 years at an 8% per annum interest rate and did nothing else, you will eventually have Ksh1,358,398. 

Being successful in investing does not have to be complicated. You can take it at the rate that you can. Investment requires good planning, time, patience, and consistency. 

However, when the year starts, you are motivated to start our savings plan. You are motivated to open a Money Markets Fund. You commit to starting a business and even draw a business plan. However, as the year continues, you do not commit, and before we know it, the year rolls in, and soon it is another new year, and you have not done anything significant. You fail to understand that you are losing the significant compounding power of time by procrastinating. 

In the calculation that we started with, If you were late by 5 years and only saved for 25 years, you would lose out on close to half a million as you would cash out at Ksh877,271. But if you kept saving for five more years and saved for 35 years, you would almost double the money and cash out at Ksh2,067,801.

The power of compounding and time are your good friends when it comes to investing.

Planning for your investment allows you to map out your goals and plans. You know how much you need to commit monthly, depending on the goals. It saves you the temptation to get caught up in get-rich-quick schemes that end up defrauding you.

When planning for your investments, you also understand your risk tolerance. The calculations shared above are very conservative. There are investments that you can make that have much better returns however, with the high potential of earning comes a high risk. Understanding your risk tolerance will help you understand what investments to get into and which ones to steer clear of.

Read Also: 15 Investment Terms You Need to Know Before Investing

Retirement Planning

Retirement planning is a life event you should prepare for, but unfortunately, many people start thinking about retirement when it is too late. Hence, even when they retire, they do not fully retire, they still have to work to subsidize their lifestyle.

Retirement planning is something that you should start doing as early as now. As you plan for your health and investments, you should also plan for your retirement.

Planning for your retirement forces you to think about what sort of life you would like to live after you retire. For many people, the retirement plan involves returning upcountry and living a quiet life there. This then requires that they buy land upcountry and build a house there. You get to design your retired life long before you retire.

With that, you also know how much you need to commit if you start to set up your retired life as you desire today.

Like investing, retirement preparedness is a game of consistency, time, and compounding. As you set aside monthly savings, make sure you also put aside a retirement investment fund.

You can choose to subscribe to a retirement plan. There are several retirement plans in the market, and it would benefit you to research and find one that suits your needs. Or you can design your plan and invest for yourself. 

Read Also: How Much Does a Kenyan Need to Retire at 45?

Family Planning

Having a family is a social decision but also a financial one. During the festivities, you interact with your family members, and they ask you, “When are you starting your family?” Or if you have one, “When are you getting another child?”

This might have gotten to you, and you might think having a child would not be so bad. However, before you give in emotionally, you must prepare yourself financially.

It is true that “kila mtoto anakuja na sahani yake,” but you do not have to use this phrase as a reason not to adequately prepare yourself financially for such a commitment.

Secondly, having a child changes the dynamics of a family. Will the child's mother have to stop working for a while to have the child and nurture them? How will that impact her career, your family finances, and your relationship? 

Hence, properly planning your family is advisable to ensure that all parties involved are well cared for. Starting a family should be joyful; you should aim to keep it that way by adequately planning for it.

Read Also: How to Financially Prepare for a Child

Taxes

Give to Ceasar what belongs to Caesar is wisdom from the good Book, the Bible. Correctly so because if you fail to, you might end up on the wrong side of the law.

As you plan to make money, save, and invest, you should also factor in the taxes. 

Lack of factoring in the taxes makes you feel like the government is taking money out of your pocket. If you want to make a million shillings, you should factor in the taxes related to what you will do to earn the million shillings and realize you will need to make a million plus the taxes to hit your goal.

Planning for taxes makes it easier and saves you from being at loggerheads with the government.

Especially in Kenya, where taxes are being adjusted very often and inflation is climbing, you cannot afford to be caught flatfooted. 

Read Also: 7 New Government Taxes and Fees Coming in 2024

Emergency 

Emergency planning seems counterintuitive. However, while it might be an emergency, you should not be unprepared. You might not know when it is coming. You should always be prepared.

Preparing for emergencies will require you to have an emergency fund. An emergency fund is money you set aside for occurrences that you had not factored into the year's planning. 

Ideally, a sufficient emergency fund should be three to six months of living expenses. 

If you do not have an emergency fund yet, it is high time that you start one this year.

Read Also: Easy Steps to Create an Emergency Fund in 100 Days

Wrapping Up

There are events in life that you cannot afford to walk into unprepared. Doing so will make your life unpleasant. Therefore, as you enter the year, prepare yourself financially for the outlined events; when they happen, you will have a much easier time traversing them.