How do you deal with life challenges? In this article, I would like to share the 5 most stressful life changes that can happen to anyone and how we can deal with them financially.
It has been a train of events since April when the government announced the nation was transiting into the endemic phase, followed by the Ramadhan month and then the “sudden” Hari Raya, which put many Muslims in a panic and unprepared mode.
That’s life, full of unexpected events, and no matter what, the days go on, and it never pauses to wait for anyone.
Taking this year’s Hari Raya as an example, it took us by surprise when the announcement was made.
Many people were “caught” in the situation whereby the Hari Raya cooking had not been completed and had to stay up the whole night to cook, while some had to rush back to their hometown on that very night itself.
Looking back in time, that was only a Hari Raya celebration, but many people went into panic mode due to a lack of preparation.
Now, imagine, instead of Hari Raya, what are some other unexpected and stressful life changes in life that one may encounter? And what can we do about it to get ourselves more prepared?
Let’s take a look!
5 Most Stressful Life Changes – Sudden Injuries
Our life is full of unexpected events, and accidents may happen anytime and anywhere when we are least expecting them.
And sometimes, immediate surgery or medical treatment is required.
How many times have you seen a road accident?
When was the last time you saw one?
Do you feel anything when you pass by one?
That could be you, your loved ones, your colleague, or your best friend.
No injury should be seen as just another statistic.
As careful as we hope to be, accidents happen.
Loss of limbs, broken bones, fractures, burns, or any injury on any part of the body can happen to us anytime.
Besides the emotional distress, there will also be the matter of medical costs and possible loss of income. Are you prepared for it and getting the best treatment for a speedy recovery?
5 Most Stressful Life Changes – Job Loss
During the lockdown, we witnessed many who had lost their jobs or had to shut down their business.
And in many cases, very short notice was given that left them with no immediate income to sustain their living expenses.
In such a situation, where is one supposed to turn to and get financial aid?
And with inflation and high living cost, any “compensation package” provided may not last long enough for the family to survive.
The fundamental question we should ask ourselves is, how much emergency funds have we and should we accumulate to de-risk this scenario?
5 Most Stressful Life Changes – Loss of Income Earner
Are you or your spouse the sole breadwinner of your family?
Dual income sources in the family are always the best, but sometimes not possible for some families.
What if you are the sole breadwinner and suddenly passed on due to a fatal accident?
Or what if it could be your spouse who passed on instead?
When a family loses its key income earner, it has a significant impact on the family members reliant on the income for their day-to-day living expenses.
What steps have you taken to safeguard the family finances to help them continue with their lifestyle?
5 Most Stressful Life Changes – Critical Illness
Are you prepared for critical illnesses such as cancer, stroke, or heart attack as one of the more than 36 types of terminal diseases?
Life is unpredictable. Despite the steps that we may take to take care of our health, hereditary, environment, or poor diet may succumb our body to one of the many dread diseases.
Who will take care of you?
Do you have enough money to pay for the surgeries and all other medical bills?
Are you still able to work and generate income? Are you prepared for this scenario?
5 Most Stressful Life Changes – Divorce
“For better, for worse, for richer, for poorer, in sickness and in health, to love and to cherish, until death do us part.”
That moment of everlasting bliss and a desire to live happily ever after is something every couple wishes to have.
Nobody wants a divorce. But unfortunately, life doesn’t always go as we wish. Despite the efforts that couples make to try to stay as one, many of them fail to maintain their relationship in marriage.
Life is more complex these days, which makes a happy marriage harder to sustain. Or is it really?
Whatever it is, when divorce or separation happens, it can cause lots of stress and emotional pain for both parties, and the children, too.
The change in routine, lifestyle and expense management are among the top worries for many couples.
Money is needed to settle legal matters such as dividing assets with a joint name, getting a lawyer on the separation matters, custody of the children, moving house, etc.
And you will need to rewrite your will or wasiat.
Dealing with Stressful Life Changes from the Financial Angle
Life is full of ups and downs.
And we will most likely have to deal with 2 aspects always: Emotional and Financial.
I am not a relationship expert, but I can share with you what I believe from a Financial standpoint.
Emergency Funds
Be it sudden injuries, critical illnesses, sudden death, job losses, or divorce, it is clear that we must always have emergency funds ready for any of these life-changing events.
The rule of thumb is to build yourself at least 6 months of living expenses in the emergency fund. But this is probably the bare minimum now or insufficient.
With lessons learned from the pandemic, it is perhaps advisable I think we should strive to build emergency funds for up to 2 years.
Crazy as it sounds, but that is an ideal state to consider as a goal to work towards to.
Get Enough Life Insurance Coverage
Having an adequate emergency fund will protect you in the event of job loss, divorce, or any possible scenario where you are still healthy and well.
But what happens if you are severely ill, disabled, or pass on unexpectedly?
In insurance terms, these are the scenarios of critical illness, total and permanent disability, and death, respectively.
As part of the financial planning process, it is important to identify if your insurance coverage is sufficient for each scenario and in accordance with your financial objectives.
Get Adequate Insurance Coverage in Other Areas
Besides life insurance, you should also be aware of other insurance coverage that can cover your house and car. Unexpected fire or flood may cause significant damage to your properties.
Do you recall the massive flash flood in Malaysia back in December 2021? There was a lot of damage to living quarters, vehicles, and offices.
Ensuring you have insurance coverage to defend your wealth against such a scenario will give you peace of mind.
Indeed, it may seem like a waste of money, but you got to weigh and manage the risks.
For instance, if you are living or frequenting places generally on higher grounds, you may argue that you need not cover yourself against flood in your car insurance.
If in doubt, you can always reach out to your wealth advisor for more clarity on what coverage you need.
Last Will, Last Responsibility
Your last will or wasiat is your last responsibility to your loved ones.
In the event of your passing, you will want to ease the pain of your loved ones by making the distribution of your assets smoother.
Having a will or wasiat done will help ensure your assets are distributed according to your wishes.
More and more people are aware of this and taking action to get their will done up.
But there are still many people who have yet to do so.
And this could be because there are many other things to worry about.
Yet, life is fragile. We never know what can happen to us today.
How Do We Prepare for the Unexpected?
Recognising the 5 most stressful life changes that can happen to any of us, preparation is key.
We ought to get ourselves ready and plan ahead. The initial challenge is always about taking the first step.
You have to decide first that you desire to take charge of your life.
Take the bold step to reach out to a professional who can guide you if you think you need help to get your financial journey right!
If you believe I can help, do reach out to me here.
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Do leave a comment if you have any thoughts to share.