Money – Expect the unexpected

By Grant Clifton

Ever heard the saying “most people put more time into planning their holidays than they do their finances”? Think back to the last time you sat down and reviewed your own financial situation, then think back to the last time you planned a holiday or trip away? Which was more fun? My guess is that it would have been the holiday planning, with the excitement and anticipation of what was to come.

It rings true for most people that they put things off which they don’t find a pleasant experience, when they know in reality that a good plan for the future would make more sense and bring long-term rewards and gains financially. In my years in the financial world I have seen many different scenarios that can play out and affect people’s lives unexpectedly. I remember the first mortgage I arranged for some clients after I left the bank and became an advisor. A lovely Samoan family had purchased their first home. They settled the purchase, moved in on the Friday and on Saturday, the father was crushed by a forklift at work and died as a result of the injuries. Although a very sad and upsetting situation, I was glad that we had also put in place mortgage protection cover and the mortgage was paid off, leaving his wife and children a debt free home.

Then there is the all too common situation of the self-employed person making one disastrous business decision which results in the business failing and the the family suffering the financial stress that goes with that. Or, the really common occurrence now, of one of the breadwinners in the family getting sick and being unable to work and provide an income for the family. All these situations are as horrible as they are real. However, the risk can be reduced or eliminated with a good financial plan.

A good plan will cover the ‘what if’ scenarios and will ensure you get from where you are now to where you want to be. This might be moving from a renting situation to owning your home or maybe buying your second or third property. It may be planning to put money aside for your child’s education or for a world trip. Whatever it is, without a plan and some steps to get you there, it may not ever happen. Plan for where you want to be, know what risks you face and reduce them. Or expect the unexpected!