With ample warning, you can handle even major financial changes with ease. Planning for an unforeseen change also gives you a better chance of handling it well. As with most difficult situations, the steps to take are easy to understand, but take some work to implement.

Let’s look at an example scenario to see some of the preparation that may be required. Assume that your major change is having a first child on the way. Further assume that your household income will be cut in half because either you or your spouse is planning to stop working.

Update Your Budget

Suddenly a budget is even more important than ever. Rather than just helping you to understand your spending to minimize waste and maximize saving, an accurate budget may mean the difference between financial success and ruin. Difficult cuts to your spending may be easier as they become more urgent and you have a concrete reason for making them.

Adjust Investments

Along with your income and expenses, your investment portfolio should also be reviewed. Both the birth of a child and a reduction in income probably change your risk profile. Making appropriate adjustments ahead of time will be much easier than after the fact.

Reassess Housing Costs

You should also reassess your housing situation, as this is typically one of your largest expenses. Even though you’ll probably need more space with a child, your finances may warrant a reduction in housing costs. You may simply need to delay major upgrades or renovations for a while or take more drastic measures, such as moving to a more affordable location.

Estimate New Expenses

Even as you’re trying to make cuts in other areas, realize that any change (including a new baby) will most likely result in new expenses as well. Along with the gear and supplies for the baby, entirely new categories such as college savings come into play. Research your potential expenses using an online calculator or talk to a friend who is also a new parent.

Be Realistic

The best estimates of future expenses are still only estimates. Expect there to be errors in some of your assumptions. Living on a tighter budget than necessary, even if only until your new situation settles out, will only help your finances.

Dealing with change can be difficult on its own. Adding in the impact that change can have on your finances only makes things worse. Balancing those inherent difficulties with the benefits of the new situation and a carefully executed plan will help to bring all changes into a more positive light.

Tough economic times call for new ways of looking at things. Creativity allows deals to materialize where none seem to exist. Realizing that such power exists in the mind is liberating and opens up a whole new world of possibilities.

Consider the Australian family who found a house on eBay for $1. Even with the caveats that surrounded the sale and the fact that the house needed to be moved, the deal was still worthwhile. Including the $40,000 costs to move the home and the estimated $20,000 for repairs, rewiring, and site preparation, the home will still cost considerably less than if the family had bought a house by a more traditional route. Since the family won’t be borrowing money to finance the deal, they’ll save even more in interest charges.

Everywhere you look, there are unconventional opportunities to make, or save, money. The trick is knowing to look. There’s nothing that says that all spending must be done in an unconventional manner. You can pick and choose which areas of your life could benefit the most from this philosophy. If you prefer to buy a house the traditional way, but get creative in how to finance your car purchase, that’s fine.

Many borrowers have learned to shun the banks and turn to social lending sites for better rates to meet their financing needs. That kind of thinking is indicative of the potential for success. Considering new or non-traditional methods gives you another option to choose from. More choices mean that you’ll be more likely to find a favorable solution.

Tough times may force you to consider unconventional options. The power that results from this will help you to see that such solutions exist at all times. In the end, you may come to realize that a temporary hardship helped you to discover a wonderful new way of viewing the world.

The current state of the economy is changing consumption habits in unprecedented ways. A combination of factors, notably high energy and food prices, coupled with the woes in the housing and credit markets, is creating the perfect storm for change.

Changes made for the better don’t have to be temporary. When the economy starts to improve, the benefits of such changes will increase even more. If high gas prices inspire you to use alternative transportation or a more fuel-efficient vehicle, you would continue to benefit from that change even if gas prices did start to come back down. Tightening your grocery budget to maximize each dollar you spend is a great habit, regardless of food prices. Similar improvements in your housing or debt situations would have the same effect.

As counterintuitive as it may sound, a prolonged downturn in the economy could actually benefit your finances. Short slowdowns require few modifications to your spending and even those changes that you do make are easily reversed when things improve. A longer slowdown will make frugal behavior become part of your normal routine. Long-term habits, even good ones, are more difficult to break.

Retailers have noticed changes in consumer habits and are trying to align themselves with their customers in new ways. Just about every type of company, from car dealerships to tourism councils, seems to be offering some type of gas incentive along with their normal products. Whether or not such a deal is worth it depends on the situation, but does show a fundamental shift in the type of promotions and marketing used by these companies.

A changing economy is more than just a reason to adjust your investments, your budget, and your spending habits. It can also provide a growth opportunity in your financial education. Creating something positive out of a negative like a slowing economy is great, but continuing good habits after the economy improves is where you’ll see the greatest benefits.

Inflation is generally defined as the rate at which the general level of prices for goods and services is rising. It only seems natural that things get more expensive with time as we see cars, houses, gasoline, and more fetching progressively higher prices. While inflation is certainly a cause for concern, do we overestimate its true cost?

One of the main reasons why prices keep going up is that our definitions of products keep changing. I already discussed how a “starter home” of today is more like the dream home of just a decade ago in a recent post. Many other products follow suit. Today’s base models of most products are superior to the top of the line model from just a little while back. Consider a technology item like a computer. Even if computers cost more than they did a year ago, what you’d get for the money would probably have at least twice the speed, memory, capacity, etc. In fact, that feature-rich computer probably costs even less than the inferior machine did last year. These changes in prices, typically attributed to inflation, would better be described as the cost of a rising standard of living. We can’t expect our standard of living to increase without costs going up.

The measure of inflation generally quoted is the Consumer Price Index (CPI). The CPI is a measure of the average price of consumer goods and services purchased by households. Since the CPI calculates prices for specific products and services, it does not take into account that consumers may choose alternatives if a specific item becomes too expensive. The fact that the items used to compute the CPI are often better (as in the computer example) is also not sufficiently taken into account.

Another main issue with inflation is that once you make a purchase, it doesn’t matter if prices for that item continue to climb. Does it really matter if appliances cost more now than when you bought yours last year? Yes, 15 years from now, when you need to replace them they may cost more, but rising prices don’t affect you unless you are buying.

Some products and services are going up in price, and inflation can be a real problem. But for those people who are content with their current standard of living and willing to wait for features available in today’s top models to make their way into the base models, many prices will actually come down over time. Tracking your spending will allow you to calculate the only number that really matters to you: your own increase in costs over time.

Can the new iPhone actually save you money? Yes. A 16GB iPhone will cost you $300 at the store, but it will save you at least $500.

Apple's popular product has been a hit with consumers, and it has been a revolution for the phone, music player, and mobile Internet industry... all this, despite its high price tag.

Smart consumers notice a deal when they see one, and even though it takes a good deal of looking, there is a deal to be found in the iPhone. With its features galore, there is virtually nothing that the iPhone can't do, and paying for products to do each of the iPhone’s tasks will add up faster than you might imagine.

Spending $300 might seem like a lot, but looking at the following list will show you that you’re getting a steal.

Phone

The fact that the iPhone is, in fact, a phone normally gets lost in the conversation of touch screens and technology. But the phone service is where it all starts for the iPhone. Sure, there are other cell phones on the market, but there are none that have as many features or do as many tasks as the iPhone. For the most part, every model of cell phone, whether it is an LG, a Motorola, or any other manufacturer, will provide similar service. The iPhone is no different; it fits right in with the rest and may even improve on the standard. At the very least, having a cell phone of any kind, especially one as powerful as the iPhone, could save you the expense of a land line or other phone service.

Savings: $50 for phone service installation and purchase of phones for the house.

iPod

A phone and MP3 player combined in a single device was bound to happen sooner or later. Both devices are mobile enough to take anywhere, so it makes sense to combine the two into one easy-to-use piece of technology. Apple has the advantage because its MP3 players are the most popular ones around. Owning an iPhone, then, makes the purchase of an MP3 player obsolete. With storage space galore on the iPhone, consumers only need to focus their spending in one direction and save themselves the cost and inconvenience of toting around two devices.

Savings: $250 iPod Classic 80GB

Internet browser

The web is going mobile at an alarmingly fast rate. Surfing the ‘net is possible virtually anywhere, which is exactly what the iPhone had in mind when it included a powerful web browser. Whether you are watching YouTube or checking your email, it can all be done from the comfort of your iPhone touch pad. With this benefit, you may find less of a need to log on with your desktop and more of a desire to let the web go where you go.

Savings: $33 monthly DSL Internet service

Camera

The iPhone boasts one of the nicest cameras in the cell phone market. The 2.0 megapixels are more than you will find pretty much anywhere else, and in some cases Apple has doubled the image quality of its competitors. Plus, with the Internet at your fingertips, uploading your pictures to a Facebook profile or Flickr is easy. Who needs a digital camera anymore?

Savings: $100 basic digital camera

GPS Device

There is nothing worse than feeling lost and alone in a big city…or even your hometown. The iPhone has you covered with an application that allows your location to be pinpointed with GPS. You will always know where you are with the precision of the technology, and you will always know where to go next with the helpful maps that come with the program. So rather than drive around aimlessly or ask at a service station for directions, you can do it all from the comfort of your phone.

Savings: $15 road atlas

Video games

Some feel that the future of video games is headed to the iPhone, and while that day may be far off, there are certainly plenty of programs for video game geeks to love that are already on the mobile device. Purchasing games through the application store is a simple process, and several of the available downloads are as good as or better than their console predecessors. Super Monkey Ball may be a classic on the GameCube, but it is getting a new life on the iPhone.

Savings: $300 video game console and games

The New York Times

The newspaper has a home on the iPhone, too, thanks to a powerful add-on and the quick, convenient web browser. The New York Times can be up on your screen in moments with the iPhone, and virtually any other newspaper is within your reach.
Savings: $1.50 Sunday edition of New York Times

Notepad

Taking notes is a snap with the iPhone, and there are no pens or paper necessary. The iPhone does it all in a variety of ways: typing, writing, or even voice recording. You may never forget anything again.

Savings: $5 steno pad and pen

Books

Johannes Gutenberg probably did not envision this when he invented the printing press. Thousands of books are now available to read on your iPhone, and more are being added every day. While the touch and feel of a hardback or soft cover can never be replaced, the ease and convenience of reading on the go may be a cheaper, faster solution.

Savings: $15 per book

Internet radio

Pandora is one of the most popular streaming music sites on the Web, and it is fast becoming one of the most popular add-ons for the iPhone. Choosing what you want to listen to was an inalienable right the founding fathers would have been proud of, and being able to do it on your phone is even greater. The iPhone has changed the way that a lot of people listen to the radio.

Savings: $25 boom box

There are many more features of the iPhone that can save you money in the long run. This list alone includes nearly $800 of products, which will more than make up for the price of the iPhone. Not only does Apple’s new toy look snazzy and work effectively, it will also save you money in the big picture.