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Regardless of where you are going, as an expat or a local, it is critical to consider the “what ifs.”

Most people do not think twice about financial planning for tomorrow, but it can be one of the most important decisions you make for your financial future. The ‘what ifs’ include all of those financial problems that could happen down the road. Taking the time and patience to work on them now can help minimise the risks you face later. What are these situations? What can you do about them?

Are you living paycheck to paycheck?

One of the first steps for individuals to take is not opening accounts or starting savings, but analysing where they are right now financially. For some people, earning enough money to pay the bills each month is the focus. For others, there are plenty of funds coming in but just as many, or more, going out. It is important to step back in both situations and start considering how you can avoid living from one paycheck to the next.

– Estimate your monthly debts and expenses

– Determine how much income is coming in

– Set aside a percentage of the income for “what if” situations

– Plan for your long-term future as well through retirement planning or savings

Once you have an idea of how much you are spending and where you are spending it, you can begin to clarify the options moving forward.

What are What If situations?

Most people hope that nothing financially troublesome will ever come their way. Wealth advisers make it part of their goal to help people from all walks of life play for these situations. It’s important to realise that a clear financial roadmap will have pitfalls along the way. It is possible to avoid the worst financial concerns by making a few decisions now. What if situations can include:

– Long term care for family members

– Having a disabled child

– Facing a business failure

– Losing a job for a long period of time

– Facing disability or illness yourself

The goal is to put together a map that considers these life changes, which can lead to financial hardship now, long before they happen. Hopefully, they never will. However, you do not have to rely on hope. You can have a plan in place instead.

Create a contingency plan

One of the ways financial advisers help clients is to foresee these types of what if situations now, long before they actually happen. For example, when you sit down for a planning session for your financial adviser, he or she should offer clear examples of how to achieve your financial goals, within limitations of the market, of course. Additionally, he or she may recommend various options as a contingency plan. That is, these are steps taken to provide financial planning support when problems do occur.

I believe that part of a financial adviser’s goal, and your goal, is to evaluate the risks you could face and then make an informed financial decision about minimising such risks. This may be to have funds put aside for emergencies. It may include making plans that allow you to retire sooner or later as needed. It may include making changes to an estate plan if your ultimate goals and prior planning do not yield the results you hoped for.

There is no doubt that life comes at you fast and it can change very quickly. It is never possible to plan for every situation, but with the help of various tools and an experienced financial planner, it is possible to minimise the blow that these what if situations can have on you by a form of careful financial planning.

Planning for family issues, both now and in the future, is a critical component of financial planning. If you hope to become an expat, make significant changes in your life, retire early, or leave behind an impressive estate, you’ll need to address the ‘what if’ situations that could impact your long term goals. With the help of an independent financial adviser, you will be able to do just that and, in most cases, mitigate the outcomes that these financial circumstances can have on your life and the life of your loved ones.

Financial planning questions

About Mike Coady

Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.

Mike is an award-winning money coach and industry leader in the financial sector.

Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

To learn how to choose a great financial adviser, download our free guide.

Blog published by Mike Coady.