Dealing with the financial ‘downs’ of daily life

20th October 2022

At a glance

  • From redundancy to unexpected tax bills, life is full of challenges that can force you to review your finances and leave you feeling stressed.
  • When things take a turn for the worse, you may be tempted to raid your pension pot or reduce the amount you’re paying into savings, but this isn’t always the best course of action.
  • Regular reviews with us can help you deal with dilemmas as they arise and safeguard your financial future.

However well you’ve mapped out your financial future, there’s always the chance that there will be some bumps along the way.

We’re not talking about how to overcome the biggest financial challenges, such as buying your first home or saving enough for retirement. You’ll likely have considered these and the many other major milestones, such as having kids or starting a business, and worked them into your plan already. You might also have done a bit of disaster planning by taking out life insurance.

Rather, we’re thinking about how you manage the daily ups and downs in your life. Not necessarily life-changing events, but the smaller financial challenges and opportunities we all face from time to time.

With the right action, ups can give you the chance to get ahead of the game (and you can read how here), but in this article, we’ll focus on dealing with the downs: short-term financial challenges that could send your plans off track.

Anything from redundancy to an unexpected tax bill can force you to review your finances and limit your ability to save for the future. It can be a stressful time as financial concerns can have a huge impact on your overall emotional wellbeing.

Contact us to discuss the challenges you’re facing, and we can help you make the right decisions for you and your family.

The importance of advice

Lots of people are feeling the pinch right now. Soaring inflation is a challenge for everyone, and even if you’ve always been comfortable, you may now find yourself needing to tighten your belt.

Forgoing luxuries is a no-brainer, but it does take willpower. All too often, people take more drastic steps, cancelling insurance or reducing the amount they’re paying into savings or pensions.

There are often easier and more practical ways to trim your spending without affecting your lifestyle too much in the short term or cutting back in areas that could have serious ramifications further down the line.

The current economic climate is likely to be an even greater concern if you’ve retired or are on the cusp of doing so. You might be wondering whether you can afford to give up work or, if you’ve already retired, you may be worried about how much you can safely draw from your pension.

Taking money out of your pension while markets are falling or increasing your withdrawals could put significant pressure on your pot.

This is why it’s always good to chat to us when your challenges arise, so we can put a plan in place and set your mind at rest.

The same goes for other less-universal challenges you may face.

For example, you’ll sometimes find yourself in need of a big lump sum. You might be doing building work on your home that’s rumbling on longer than you’d anticipated, or perhaps costs are going through the roof. You might be a business owner and need to find some short-term finance to cover a VAT bill.

We can alleviate the strain and help out with a variety of solutions, such as remortgaging or taking out a short-term bridging loan. If you need to liquidate assets, we’ll talk you through the tax considerations and make sure you’re selling the right ones first.

If you have a pension and are over 55, you might be tempted to dip into that pot of cash. But taking money out of your pension before you retire could land you with a significant tax bill.

Why is planning ahead important?

Not everyone has assets they can draw on in tough times, while many simply don’t want to raid savings they’ve accumulated for other goals.

However, you can work with us to plan for potential problems before they happen.

One option is to consider an income or mortgage protection insurance policy. These can cover your most important bills if you’re made redundant or suffer a short-term health problem that stops you working for a while.

Alternatively, we can help you build a dedicated pot of cash to enable you to deal with daily financial challenges as they arise.

By planning ahead, you’re less likely to get knocked off course when life throws you a curveball. And you don’t have to lose sleep worrying about how you’ll manage if disaster does strike.

It’s impossible to plan for every eventuality, but we can help you cope with all these short-term challenges.

Make confident financial choices. Get in touch with us today.

Your home may be repossessed if you do not keep up repayments on your mortgage.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

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