5 Must Do Things To Prepare Yourself For Life Surprises

They say two things are certain in life; death and taxes. But if there is one thing that the ‘Life Surprises’ survey conducted by Sanlam a while ago has taught us, it is the fact that life will also throw us some curveballs. 

This survey conducted among South Africans over the age of 50 found that 78.5% of South Africans had faced at least one unexpected life surprise.

It also found that the events felt most severely – both financially and emotionally – were financial events such as loss of savings, a business closure or a retrenchment. And it further showed that most people were not well prepared financially for these events.

Here are some respondents’ experiences:

• “I lost my job because of illness. I couldn’t provide for my family when I lost my job,” Father from Pretoria. 
• “Losing my job put me into uncertainty, and depression followed afterwards,” Man from Cape Town.
• “My father’s death at a very young age left us with no breadwinner,” Woman from Cape Town.
• “I lost my house and savings and had to start again at 42,” Man from Johannesburg.

1. Start and maintain an emergency fund

This should be equal to between three and six months of your monthly salary. Remember that you need to access it quickly so an investment such as a money market account is appropriate. This will not solve all your problems, but it will provide a healthy cushion in an emergency.

2. Have a financial plan

Work with a professional financial adviser to draw up a holistic financial plan for your life – in the short, medium and long-term. As part of this process, think through some of the most financially impactful events which you may face – such as loss of income through illness, retrenchment or loss of a loved one who is a breadwinner – and factor these into your planning so if they happen the financial impact is mitigated and in the process, the emotional impact is too.

3. Have the right risk cover in place

This forms part of the financial planning, but is worth talking about separately. Risk cover is designed specifically to help you provide financially from life’s unexpected events. Included in this category of insurance products are life cover, disability cover, severe illness and providing an income if you are unable to work due to sickness, disability or injury. Being able to ensure that your financial needs are covered if a big event takes place is not only essential for your own future wellbeing, it will also protect your family from having to step in and assist if you were not prepared.

4. Ensure you are saving adequately

Unfortunately many people see saving, for instance for retirement, as a grudge purchase when in fact it is a process which actively builds up assets and can contribute measurably to your lifestyle and financial position. Making the right provisions to save is another way that the effects of life’s unexpected events can be mitigated and it can also help you avoid becoming a burden on your loved ones.

5. Make sure you have an up-to-date will

A will protects your family from the fall-out of a big life event. Your will should clearly state what your wishes are so that your family is not placed in a difficult financial position when you are no longer here.