Life has a way of throwing the unexpected at us—whether it’s a sudden illness, job loss, or a global economic crisis. While we can’t predict what the future holds, we can take steps to protect ourselves and our families from financial uncertainty.
At Oakmere Wealth Management, we understand that life’s unpredictable moments can be daunting, but with the right financial planning, you can safeguard your future.
In this blog, we’ll explore practical steps you can take to financially prepare for the unexpected, so you can face life’s challenges with confidence and security.
Build an Emergency Fund
An emergency fund is the cornerstone of financial preparedness. This fund is your financial safety net, providing a buffer for life’s surprises, such as medical bills, home repairs, or sudden unemployment. Ideally, an emergency fund should cover 3 to 6 months of living expenses—this includes rent or mortgage payments, utilities, food, insurance, and other essential costs.
The key to building an emergency fund is consistency. Regularly setting aside a portion of your income, even if it’s a small amount each month, can quickly add up. It’s also essential to keep these savings in an easily accessible account, such as a high-interest savings account, where you can access the funds when needed.
Get the Right Insurance in Place
Insurance plays a crucial role in protecting you from life’s uncertainties. The right insurance policies can shield you from financial loss in the event of illness, injury, or death, providing peace of mind that your loved ones are protected. Here are some key types of insurance to consider:
Life Insurance: This ensures that your family is financially supported if something happens to you. It can help cover expenses like mortgage payments, daily living costs, and future education fees for your children.
Critical Illness Cover: If you’re diagnosed with a serious illness, such as cancer or heart disease, critical illness insurance provides a lump sum to help cover treatment costs or replace lost income.
Income Protection: This policy protects you in the event that you’re unable to work due to illness or injury, providing a percentage of your income until you can return to work.
By reviewing and updating your insurance policies regularly, you can ensure that your coverage remains appropriate as your life circumstances change.
Establish a Will and Estate Plan*
Estate planning isn’t just for the wealthy—it’s for anyone who wants to ensure their assets are distributed according to their wishes. A will is a key part of estate planning and helps your loved ones avoid legal complications and unnecessary stress in the event of your death.
In addition to a will, consider establishing a lasting power of attorney (LPA)*. An LPA allows someone you trust to make decisions on your behalf if you’re unable to do so, ensuring that your finances, medical care, and other important matters are handled according to your wishes.
By creating a comprehensive estate plan, you can protect your family from uncertainty and ensure that your wealth is passed on in the way you intend.
Review and Optimise Your Debt
Debt management is an important component of financial planning, especially in uncertain times. While debt is a reality for many of us, ensuring that you manage it effectively can prevent it from becoming a burden during unexpected life events.
Consider the following steps to keep debt under control:
Prioritise high-interest debt: Focus on paying down high-interest debt, such as credit cards or personal loans, as quickly as possible. This will reduce the overall cost of your debt and free up cash for savings or investment.
Consolidate where appropriate: If you have multiple debts, consolidating them into one loan with a lower interest rate can simplify your payments and potentially save you money.
Avoid taking on unnecessary debt: In times of uncertainty, avoid borrowing money for non-essential expenses. Instead, focus on building your savings and reducing existing debt.
By managing your debt effectively, you’ll be better positioned to cope with unexpected financial challenges.
Diversify Your Investments
While investing can help grow your wealth, it’s important to diversify your portfolio to reduce risk, particularly in uncertain economic times. Diversification means spreading your investments across a range of asset classes—such as equities, bonds, property, and cash—so that your portfolio is less exposed to volatility in any single market.
At Oakmere Wealth Management, we work with our clients to create investment strategies that are aligned with their risk tolerance and long-term goals. By maintaining a balanced and diversified portfolio, you’ll be in a stronger position to weather market fluctuations and protect your wealth in the face of unexpected events.
Create a Contingency Plan for Your Business
If you’re a business owner or entrepreneur, it’s essential to have a contingency plan in place to safeguard your business from unforeseen challenges. This might include:
Business interruption insurance: This covers the loss of income your business might face due to unexpected disruptions, such as fire, flood, or even a pandemic.
Succession planning: Ensure that your business can continue to operate in your absence by creating a clear succession plan. This includes identifying key people within the organisation who can step in and lead, as well as outlining how ownership and responsibilities will be transferred.
Cash flow management: Keeping a healthy cash flow reserve for your business ensures that you can continue to operate during difficult times, without having to take on additional debt or cut jobs.
By proactively preparing your business for the unexpected, you can protect both your livelihood and your employees during times of uncertainty.
Work with a Financial Planner
Financial planning is complex, and preparing for the unexpected often involves managing multiple aspects of your financial life. Working with a trusted financial planner can help you navigate these complexities and create a comprehensive plan tailored to your needs.
At Oakmere Wealth Management, we take a holistic approach to financial planning, ensuring that every aspect of your financial life is protected and optimised. From building an emergency fund and managing debt to ensuring your insurance coverage is adequate, we help you put a plan in place that provides peace of mind, no matter what the future holds.
Final Thoughts: Stay Prepared, Stay Confident
Life may be unpredictable, but by taking the right steps to financially prepare for the unexpected, you can face any challenge with confidence. Whether it’s building an emergency fund, reviewing your insurance policies, or diversifying your investments, each action you take strengthens your financial resilience and protects your future.
At Oakmere Wealth Management, we’re here to help you create a financial plan that not only meets your current needs but also prepares you for life’s uncertainties. If you’d like to discuss how we can help you build a more secure financial future, don’t hesitate to get in touch.
*Will writing and Powers of Attorney involve the referral to a service that is seperate and distinct to those offered by St. James's Place and along with Trusts are not regulated by the Financial Conduct Authority.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested. Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.
Comments