As I write (July 2020) the country is easing out of lockdown and we are beginning to see some of our old freedoms restored.
This time last year no-one would have predicted COVID19 would arrive on our shores or the devastating impact it would have on us, both personally and economically.
One thing this period has highlighted is that many people are not financially prepared for upsets of any kind, including a pandemic.
According to a recent poll carried out by Aegon, this is particularly the case for women. Conducted in December 2019 (before the pandemic) the research showed that only 21% of women were confident that they could financially handle a major unexpected expense, compared with 30% of men. The research also revealed that more women than men worry about money (76% compared with 72%). The pandemic is likely to have exacerbated these differences as research from the IFS (Institute for Fiscal Studies) shows that mothers are more likely to have been furloughed than fathers.
The future is by its nature an unknown territory. We couldn’t have predicted the pandemic and we don’t know what’s around the corner. That being the case, it’s really important that we put financial plans in place so that when the next crisis happens, we are ready.
In my book, Your Bigger Future, I dedicate a chapter to Healthy Personal Finances. In it I suggest that there are three principal eventualities for which we must all plan. These are:
What will happen if we fall sick, are injured or become ill
What will happen if we die prematurely
What will happen if we live to a ripe old age
By making financial plans for the above scenarios, we will have effectively laid the foundations for a successful lifetime financial strategy.