How to Rebuild Your Finances After a Major Life Change
How to Rebuild Your Finances After a Major Life Change
Experiencing a major life change can have a large impact on your lifestyle, wellbeing, and finances. Ensuring you’re prepared for anything that comes your way can help you maintain stability during turbulent times, and enable you to achieve your goals.
At Hansford Bell, we help our clients to create financial plans built on solid foundations that can withstand the impact of major life events. In this article, we’ll offer a step-by-step guide to help you take control of your finances and rebuild a secure financial future.
Are you looking to restore your finances? Get in touch today.
Understanding the Financial Impact of Major Life Events
Major life changes – like divorce, job loss, or the loss of a loved one – can all have detrimental effects on your personal finances.
During a divorce, you may lose up to over half your assets, depending on the agreements you had in place surrounding your marriage. This can be incredibly challenging to recover from, especially given the emotional duress you may be under.
Job loss has the clear effect of eliminating a sizeable source of steady income. This has obvious impacts on your financial situation, and can cause bills to be unpayable or credit to be unobtainable while you search for a new position.
The loss of a loved one has a financial impact due to the emotional state it may put you in. For some, they will require extensive time away from work to recover, which can have an impact on their finances. Considering the potential impact of bereavement – and planning ahead – will ensure you’re ready when the time comes.
Learn what financial resilience is and how you can achieve it >
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Invest Wisely with a Financial Planner
Investing your money wisely is critical if you want to retire comfortably as a self-employed individual. The stock market can be a great place to invest your money, but it can also be risky. However, you can still do your research and learn about different investment options, such as mutual funds, shares, exchange-traded funds (ETFs), and bonds.
Luckily at Hansford Bell, we can help take this stress away. Our leading wealth management experts can advise you on the best places to invest your money to enhance you investment portfolio.
Hiring a financial planner can be an excellent way to ensure that you retire comfortably as a self-employed individual. A financial planner can help you create a retirement plan that is tailored to your individual needs and goals. They can also help you invest your money wisely and provide guidance on tax planning, estate planning, and other financial matters.
Independent Financial Life Planning Services for Self-Employed Workers
Steps to Taking Back Financial Control
While there are lots of ways that major life changes can have an impact on your financial situation, there are things you can do. Whether you’re looking for guidance or planning ahead, our friendly team are here to support you throughout the process.
For more insight, see our step-by-step guide for financial planning >
Take Stock of Your Current Financial Situation
After any major life change, the first thing you should do is to take stock of your finances. Consider what your necessary expenses are, whether there’s anything you can drop or cut back on, and what debts are a priority. Order all of your expenses into a list from most to least important, and compare this with your available funds to see what’s achievable, and what needs further considerations.
Create a Budget that Reflects Your New Circumstances
The budget you had before your major life change will likely no longer reflect your current circumstances. You may now need to put a bigger percentage of your funds into living costs, leaving less for savings or personal use. You can adapt your plan to your new circumstances, and figure the steps needed to slowly adjust it back to where it used to be.
With a financial life plan, you can create a holistic view of your circumstances and finances – making your finances work together to achieve the best results. This can get you back on track and improve your resilience against unfortunate life events.
Prioritise Your Financial Responsibilities and Debt Repayment
It can be hard to change your lifestyle and put a pause on things you enjoy during major life changes. These are the times where you’re often looking for reprieve, and spending on a hobby, holiday, or activity might seem like a good way to do that.
However, your financial situation can suffer if you don’t take adequate precautions first. You should try to prioritise your necessary payments like debts, living costs, and financial responsibilities before you spend on luxuries. We understand that this can be a challenging task when you’ve been emotionally impact, so it’s best to try and take things in moderation – spending only on what you truly need.
Work on Rebuilding Your Emergency Fund
A major life change may require tapping into your existing emergency funds. While this is good to tide you over, and the intended use of emergency money, this can put you in a vulnerable position in case any other major life events occur.
Once your situation has become more stable, it may be a good idea to work on rebuilding your emergency fund as well. This will help you stay prepared for the next challenge that comes your way.
Check out our top tips for building an emergency fund you can rely on >
When and How to Seek Help from a Financial Advisor
Sometimes, your own efforts may not be enough to reach your financial goals. Perhaps the major life change has taken a toll on you, or perhaps you’re unsure on where to start building your finances. In these cases, you may want to seek help from a financial advisor.
As Chartered Financial Planners, we help our clients to build financial life plans that enable them to achieve their dream lifestyle. This includes support for rebuilding finances, where we can walk you through the steps and create a plan that’s unique to your situation.
Support Your Financial Transition and Recovery with Hansford Bell
When you’re looking to recover your finances after a major life event, your first step should be to work with a trusted advisor. At Hansford Bell, we provide support for people undergoing major financial changes, helping you to get back on track and return to your ideal lifestyle.
If you want to find out more about how we can support your financial recovery, get in touch today. Otherwise, read on with some related articles below.
Find out how to budget for unexpected expenses without derailing your financial goals >
Recover your finances with our beginner’s guide to monthly budgeting >
Disclaimer: this article is for informational purposes only and does not constitute advice. If you invest your money, all the money you invest is at risk.
A Fresh Approach to Financial Planning and Advice.
Hansford Bell aren’t your average team of financial specialists. We take the time to get to know our clients and help them realise what they want from their life, whether that’s a personal ambition or a financial goal.
Our planners are highly experienced and know the industry inside-out. We combine simplified, straight-forward tips and guidance with cutting-edge technology and a comprehensive understanding of your situation. We focus on your finances, so you can focus on living your life.
Want to know more? Talk to us today and we can start making that dream future a reality!
