According to recent research by Suncorp, two thirds of Australians procrastinate about making financial decisions, despite 85 per cent being concerned about their financial future. This is because our brains are essentially wired to resist pain.

The major financial consequences that can happen, such as accident, injury, illness, theft or damage to our homes, are difficult to think and talk about.  

However, what is worse, not being adequately protected should any of the above scenarios happen? It is precisely at these times that you need help and support and not to be worrying further about how you will cope.  

This is why, in my private life, I always look at each situation with the worst case scenario in mind. Some may think that this is a negative way of approaching life; however, I believe it is a logical way of thinking. It is certainly one which makes sure that my family will be looked after, no matter what.  

There are some circumstances happen outside of our control, but it is in your control to implement the following strategies to protect against them.  

Death
  • Ensure that your life insurance is for the correct sums to pay off debt and leave your loved ones in a position of not having to worry about the future.
  • Check that your beneficiary forms are up to date, as they can expire every 3 years, and your beneficiary’s name and date of birth is correct.
Illness
  • Making sure you have adequate health insurance is important, but a long term illness can also have a negative impact on your personal life. The mental anguish, as well as the financial stress, can at least be mitigated by implementing some appropriate insurance that can cover the costs and plug the gaps. This may include income protection insurance to cover you in the event that you can’t work for a period of time and/or Total and Permanent Disability (TPD) insurance. Trauma insurance can provide you with a one-off lump sum if you suffer a serious medical condition, such as a stroke, cancer, car accident or heart attack.
Unemployment
  • Besides obtaining income protection insurance, it is prudent to have approximately 6 months of cash reserves or an offset account that you can rely on for short term contingencies.
  • Keep up with your education so that if you need to change industries or roles you are up to date with current requirements and have a Plan B.
Blended families
  • Before you start the next stage of your life with your next partner, discuss with a solicitor who can provide you with some advice on how to safeguard your current assets and your estate planning to ensure that your child/children are financially secure in case you are not there for them in the future.
Property loss due to fire
  • It always pays to make sure that your Home and Contents insurance is up-to-date and that you are insured for the correct amounts.
  • Ensure that you are covered for the correct sums to replace damaged property. Research shows that many Australians are underinsured in the event of natural disasters.
Stock market downturn
  • Have appropriate cash reserves and a balanced portfolio in place for your superannuation and investments (e.g. don’t put all of your eggs in the one basket).
Interest rates increasing
  • Always pay down your debt when you have one or two incomes that are healthy, so that you are prepared for extra commitments that are unplanned.

Even with the above situations being outside of our control, we can still plan ahead to limit the impact both financially and emotionally. You will feel more in control of your life and your finances when you know that there is a well-planned contingency set up for you and the family.  

As Financial Advisors and Insurance brokers we advise our clients to plan and think ahead. We can help you with this by making sure you have the correct insurance in place and having financial planning meetings with you to discuss your future.  

Talk to us anytime. Call us on (02) 8268 2900 for an obligation-free chat.