Building Financial Confidence After a Major Life Shift

Money is easily the biggest cause of worry in any household, and not just in the UK either. Family or household finances are a key cause of stress and anxiety, with as many as 34% of UK adults attributing anxiety to their own financial situation.

It comes as no surprise, then, that a sudden change in personal circumstances can be nothing short of disastrous for your sense of financial security.

Luckily, a little financial literacy can go a long way with respect to repositioning yourself, not just for the present but also for your future.

Regain Control Of Your Finances

The following words will examine the potential impacts of life after a change in circumstances, and the methods by which you can regain control of your finances for a more confident future outlook.

1. Reassessing Your Financial Landscape

“Major life change” is something of a euphemism, really, that masks some of the uglier sides of domestic life. It could refer to the loss of a crucial income stream, the devastating loss of a loved one, or the loss of a life partner through divorce or separation.

All of these have their own unique impacts, but some shared realities with respect to financial life afterwards, namely, the expectation that you live on one income or less.

Whatever the major life change, your first constructive step needs to be a thorough review of your financial situation. Understanding your current income, expenses, assets, and liabilities is nothing short of crucial for you to undertake any form of informed decision-making; if you don’t already track your financial situation via spreadsheet, now is very much the time to start.

2. Understanding Legal Financial Implications

In many cases, major life changes can invite significant legal intervention. For the loss of a loved one, this might be engaging a probate solicitor to help with the estate left behind; for a divorce or separation, this could be the use of legal counsel to assist in the division of savings, assets and even custody of any dependents.

The results of any legal action surrounding a separation or divorce can come with their own ongoing, impactful costs too. For instance, you may find yourself owing child maintenance payments to your ex-partner in certain circumstances, with a real-terms impact of reducing your take-home pay each month. Getting to grips with these possibilities as early as possible will give you the best chance of controlling your financial future.

3. Exploring Financial Planning Tools and Resources

But how are you meant to gain control of your finances if, fundamentally, your cost of living has increased relative to your household income? There are many practical ways to approach this, each of which have their own advantages according to specific situations.

A great first step, after collecting all relevant information about your new income and outgoings, would be to reach out to Citizen’s Advice for targeted assistance. Alternatively, financial planning tools like MoneyHelper’s budget planner tool can help provide you with a clearer picture of your financial future.

4. Protecting Your Financial Interests in the Future

Ultimately, the advice you’ll be following in your new domestic situation is the same advice most earners are asked to follow; save as much as you can into a long-term savings vessel, like an ISA, and budget your month carefully after essentials are paid for. With an emergency fund for unexpected costs in place, you can quickly shore up money for the long term – and keep it separate to household finances, which may once again become shared.