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Life can throw unexpected challenges our way—losing a job, going through a divorce, dealing with illness, or even the loss of a loved one. When facing these difficult times, money is often the last thing you want to think about.
However, addressing financial matters early can prevent bigger problems down the road. This guide provides practical steps to help you manage finances during life’s toughest moments.
Here are some financial challenges you might be experiencing now.
Unexpected Major Expenses
Life throws financial surprises at the worst times—your car suddenly won’t start, a pipe bursts in your home, or you need to book an emergency flight to see a loved one.
These unexpected expenses can quickly derail your budget, especially if you don’t have savings to fall back on. Many people turn to credit cards or loans to cover these emergencies, but relying on debt can make the situation worse in the long run.
The key to handling these moments without financial strain is preparation—having an emergency fund and knowing cost-effective ways to manage sudden expenses can save you from unnecessary stress and debt.
What to Do Next
Assess the Urgency
- Determine if the expense is truly an emergency or if it can be postponed while you explore cost-effective solutions.
- Prioritise essential repairs or expenses over non-urgent ones.
Explore Payment Options
- Instead of putting everything on a credit card, check if you can negotiate a payment plan.
- Look for lower-cost financing options, such as personal loans with lower interest rates.
- Some repair services or medical providers offer installment plans with little to no interest—ask about these before committing.
Use Savings or Adjust Your Budget
- If you have an emergency fund, this is the time to use it.
- If not, reallocate money from non-essential spending (e.g., dining out, subscriptions) instead of taking on high-interest debt.
Minimise Costs
- For car repairs, get multiple quotes before committing to a service.
- For home repairs, check if minor fixes can be done yourself or ask family or friends for help.
Build an Emergency Fund for the Future
- Even if you don’t have savings now, start setting aside a small amount each month.
- Aim for three to six months’ worth of expenses over time.
- If that feels overwhelming, start with a goal of €500 to €1,000 for smaller emergencies.
Redundancy
Being made redundant can feel overwhelming, especially when it comes to managing your finances and figuring out what comes next. If you’ve received a redundancy payment, it’s important to know how it’s taxed—there are exemptions and reliefs that could help you keep more of your money. But beyond that, having a solid financial plan is key.
Think about your short-term expenses, any savings you might need to dip into, and whether it makes sense to put some of your payouts into a pension or investment.
This is also a good time to explore new job opportunities or even a career change. Getting professional advice can help you make smart decisions, so you’re not just reacting to the situation but planning for your future with confidence.
What to do next
Get a Clear Financial Picture
- Review your income, savings, and expenses to understand where you stand.
- Check if you’re entitled to government support or social welfare benefits.
- Assess how to best use your redundancy payment, including savings, investments, or debt repayment.
- Explore tax reliefs and exemptions to minimise the tax impact of your redundancy package.
- Consider pension contributions to maximise long-term financial benefits.
Managing Day-to-Day Expenses
- Cover the essentials first—rent/mortgage, utilities, food, and insurance.
- Cut back on non-essential spending like subscriptions, dining out, and entertainment.
Planning for the Future
- Look into upskilling or training programs if a career change could be beneficial.
- Connect with industry contacts and explore job opportunities through networking.
- Seek professional financial advice to create a solid plan for the next steps in your career and finances.
Be smart with your money. Get a personalised quote today!
Illness or Disability
When you’re healthy, it’s easy to take your ability to work for granted. But have you ever thought, what if you got ill and couldn’t work? Or what if an accident stopped you from earning an income?
Life is unpredictable, and without a financial plan in place, an unexpected illness or injury could put serious strain on your finances. Preparing in advance can help protect your income and provide peace of mind during difficult times.
What to do next
Assess the Financial Impact
- If your ability to work is affected, reassess your budget based on your new income level, whether it’s from social welfare, insurance payouts, or reduced earnings.
- If you have income protection or serious illness insurance, check what benefits you may be entitled to. These policies can provide financial relief during recovery.
- Research disability benefits, carer’s allowances, and grants that can help cover medical and living expenses.
- Consider the potential costs of medical treatments, prescriptions, mobility aids, home modifications, and caregiving.
- If you have health insurance, review your policy to understand what’s covered and whether you must budget for out-of-pocket expenses.
Manage Debt and Financial Commitments
- Talk to your lenders. Many banks offer hardship programs, flexible repayment plans, or temporary payment breaks, so reach out as soon as possible.
- Prioritise essential bills, focusing on housing, utilities, insurance, and necessary expenses. Cut non-essential spending where possible.
- If multiple debts are overwhelming, consider consolidation or restructuring to lower payments.
If you don’t have financial protection in place, now is the time to consider serious illness insurance and income protection. These two essential insurances can safeguard your financial stability and ensure your family is financially secure if you’re unable to earn an income due to illness or injury.
While they work differently, both provide crucial support—income protection replaces a portion of your salary if you’re unable to work for a certain period, while serious illness cover pays out a lump sum if you’re diagnosed with a covered condition.
To understand which option suits you best, read our guide on income protection and learn the key details about serious illness insurance. Planning ahead gives you peace of mind and financial security when you need it most.
Gain immediate access to our comprehensive Protection Package Guide, designed to enhance your financial plan and help you achieve your goals. This guide offers vital tips, step-by-step instructions, and essential strategies for securing your financial future. Don’t wait, download now and start building a stronger financial foundation!
Your journey towards financial freedom starts here!
After you download your guide, one of our expert Financial Advisors will be in touch shortly to provide you with guidance and further relevant information to build you a customised financial plan.
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Separation or Divorce
No one enters a serious relationship expecting it to end, but sometimes life takes an unexpected turn. If you’re facing separation or divorce, the financial impact can feel overwhelming, especially if you’re unsure where to start.
What to do next
Separate and Assess Your Finances
- Open individual bank accounts and start separating finances as soon as possible.
- Take stock of your financial situation by listing your income, expenses, assets, and debts.
- Ensure clarity on who is responsible for any joint debts to avoid future complications.
Update Financial and Legal Arrangements
- Update joint accounts, loans, and insurance policies to reflect your new circumstances and protect your financial independence.
- If you own property together, seek legal advice on dividing assets and mortgage responsibilities.
- Consider child support and spousal maintenance as part of your budgeting process.
- Review your life insurance and pension arrangements to ensure they align with your financial future.
Death of a Loved One
Losing a loved one is a challenging experience, and dealing with financial matters during this time can feel overwhelming. To help you navigate this process, we have provided key steps for managing the financial side of things.
If you were your partner’s dependent but were not married, you may also need to consider tax implications on inheritance and insurance payouts. Unmarried partners can face inheritance tax on assets passed to them, which can significantly impact their financial situation.
To learn more about how this works and how to plan ahead, read our blog on cohabiting couples and tax on insurance payouts and inheritance tax for unmarried couples.
What to do next
Administrative and Legal Tasks
- Notify relevant parties such as banks, insurers, and government agencies about the death.
- Gather essential paperwork, including wills, insurance policies, and financial statements.
Managing the Estate
- Ensure the legal transfer of assets by the will or, if there is no will, under Irish intestacy laws.
- Identify any outstanding debts and work on clearing them through the estate.
Seeking Support
- Consult a solicitor for guidance on estate administration and legal matters.
- Speak with a financial advisor to understand how to manage inherited money, assets, or pensions. They can help secure your future with tax-efficient strategies, investment options, and long-term financial planning.
- Consider counselling services or bereavement groups to help cope with grief. Check if your life insurance providers offer free counselling and bereavement support for the family, providing emotional and practical guidance during difficult times.
- You may be eligible for financial support if you depend financially on the deceased. Learn more at Citizens Information.
Get a Financial Planning Quote with LowQuotes
During difficult life events, handling money can feel overwhelming, but taking small financial steps early can prevent bigger issues later. Whether you need to cut expenses, apply for financial aid, or seek expert guidance, having a clear plan makes all the difference.
Financial planning from LowQuotes can help you understand your options and create a strategy tailored to your situation. Professional advice ensures you’re making informed decisions about budgeting, savings, insurance, and long-term financial security. Remember, support is available—you don’t have to navigate these challenges alone.
We provide various financial services, such as mortgages, serious illness cover, financial planning, pensions, life insurance, health insurance, and savings & investments.
Be smart with your money. Get a personalised quote today!
All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
