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Don’t believe this will happen to you?

What would you do if you were made redundant or fell ill? What if your partner died? These are questions that no-one likes to think about. But although it is difficult to prepare emotionally for life’s tough moments, you should be prepared financially, and it’s easier than you think.

Planning ahead could be the answer to tackling the financial impact of events in your life.

Our research has shown more than three million people a year experience a negative event, yet many of us don’t act or ask for advice until it’s too late. It seems many simply don’t believe setbacks will happen to them.  

Our report, ‘Millstones and Milestones’ also highlighted that buying a home or having children often gets people into the long term habit of budgeting and saving. But those positive milestones can become financial millstones if they aren’t prepared for in advance.

For example, parents-to-be only start financial planning after pregnancy. Elsewhere, one in five first time buyers find the ongoing costs of owning a home more expensive than anticipated – and suffer financial difficulties as a result.

The importance of planning ahead – and how to do it

Sometimes the key is working out what you can afford to put aside, and being strict with yourself about keeping the money for emergencies.

It’s easy to think you don’t have money spare every month, but sometimes writing down your monthly spending can make all the difference.

Work out where you can make little tweaks. Cancel the subscriptions you don’t need, switch your energy to a better deal, or check out charity shops instead of the High Street.

It all adds up, so something that could seem relatively small, can make a larger impact. 

 

It’s a good idea to have three months bills set aside for emergencies, if you can. This doesn’t have to happen all at once, but it’s a good amount that means you have a buffer against unexpected costs without tying up too much money.

Put it into a current account or instant-access savings account so if needs be, you have access to the money without needing to give too much notice.

Could insurance help you?

Protection insurance can also help if something unexpected happens, and you can’t work due to illness or injury. There is also insurance that can pay out a lump sum to your family if you die.

The type of insurance that will work for you depends on personal circumstances, but it’s worth reading up on it and thinking about whether it’s the answer for you and your family’s needs.

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  • Lotiking Chuma / 23 August 2015

    plz tell me about how protection insurance works

  • KATHY SMITH / 3 August 2015

    Very helpful site for Life Insurance guidance but nothing here to help me find an Insurance Adviser who can provide me with a one off consultation about how tax affects my current Whole of Life insurance.(in Trust) ie re premium limits and effects of surrender.