Many life events, especially if they are unexpected and/or traumatising, can have a significant impact on your life and change the course of your ‘why’ — which may lead you to rethink the goals you have set yourself. In this chapter, I take a look at some of these major life events and some of the key issues you might need to consider.

Remember: it's always best to seek personal financial advice for your own situation.

Redundancy

Whether we're talking downsizing, right-sizing, rationalising, restructuring or simply redundancy, it all means the same thing: the business you work for has decided that your role is no longer needed, and so you find yourself unemployed. There are rules around what happens to employees who have their positions made redundant. You are entitled to an amount of money based on your years of service and your wage or salary, as well as remuneration for any unused annual leave and long service leave.

There are a number of issues to consider, which may include:

• Budgeting and cashflow
• Managing debt, if any is held
• Finding a new job and obtaining government unemployment benefits to help manage the time between jobs
• Considering early retirement (if your age permits)
• Using capital from the redundancy payment to make a non-concessional contribution to your superannuation to maximise your pension value (if you're at retirement age — Chapter 11 covers Superannuation Strategies)
• Utilising transition to retirement legislation (if you do not wish to return to work again on a full-time basis — Chapter 12 covers Retirement Strategies)
• Optimising personal deductible contributions to maximise the tax efficiency of your payment (you may be able to make a personal contribution to your superannuation account and claim a tax deduction for it, which has the benefit of boosting your super and providing a more tax-effective outcome — see Chapter 11)
• Using the carry forward concessional legislation to maximise tax deductions (you can make use of previously unused superannuation contributions limits to make a personal contribution to your superannuation account and claim a tax deduction for it — for more information about personal deductible contributions to super and superannuation contribution limits, see Chapter 11).

If you ever experience a redundancy, it has nothing to do with your value or how well you did your job. Businesses make financial decisions every day, and if reducing their staff headcount is one of them, it's about them — not you. The immediate impact for you is on your income and budget. Ongoing income is the key driver that will help you achieve your ‘why’. It's therefore extremely important to make the most of redundancy entitlements and any outplacement or career transition services available to you so that you can find a great new role to turn your income stream on again.

Marriage and divorce

Walking down the aisle or waking up and deciding a marriage is over are both big life events. Most go into marriage with the expectation it will last a lifetime, but sometimes things don't go as planned.

There are a number of issues to consider, which may include:

• Budgeting and cashflow
• Managing debt, if any is held
• Joining or separating your financial lives, depending on the direction you're headed
• Superannuation splitting, which may involve the courts (Chapter 11 covers Super Strategies)
• Assessing the legal issues involved
• Working out your new together ‘why’ or separate ‘whys’
• Getting professional help with your divorce from a family lawyer, which can save you from getting caught up in what other people you know have experienced (which may cause you further frustration and confusion).

Gaining a partner or losing one will have an impact on your financial life. Knowing your rights, what may happen next and the way forward for you to resolve the situation is vital for both your financial and mental wellbeing. Also, when you achieve your ‘why’ is likely to change — it may also look a little different now as you may be gaining or losing shared short-, medium- and long-term goals. Sometimes we have to compromise or work hard to find a way to make sure both partners' needs are met. Similarly, should you lose a partner, you probably need to spend some time rethinking your ‘why’ to make sure it fits with your new outlook over the medium to long term.

An unexpected windfall

An unexpected windfall is simply money you didn't expect to receive, and it usually comes as a very welcome surprise in your life. Examples of unexpected windfalls include winning the lottery, receiving a bonus from work or receiving an inheritance from someone who made a bequeath to you in their Will.

Many people lose their minds when this happens. Because they didn't earn the money, they get excited and sometimes blow it all.

There are a number of issues to consider here, which may help you manage the windfall experience:

• Budgeting and cashflow
• Managing debt removal
• Investing outside of superannuation in a trust or other vehicle to provide choice (Chapter 10 covers Investment Strategies)
• Adjusting your superannuation contributions — deductible or non-deductible (Chapter 11 covers Super Strategies)
• Exploring your own estate planning issues (Chapter 14 deals with Estate Planning Strategies).

The real benefit of an unexpected windfall is that it can help you jump several steps forward to achieving your ‘why’ — provided you use the money wisely. It's true that many people who come into unexpected money quickly and without effort often lose it as quickly as they gained it. It can be really hard to resist the temptation to go and splurge on things you'd never before even dreamed about buying. Instead, I'd challenge you to put the money into the bank and continue to live life normally for the next three months. This includes going to work. Give yourself some time and space to think about your ‘why’ and how the unexpected windfall can help you achieve it rationally, without the emotion or excitement.

Trauma and disability

A serious accident or trauma will have a major impact on your life. If you have a wealth protection stack in place, you may receive a payout from your insurance (see Chapter 13 for more on these strategies). If you become totally and permanently disabled, you're likely to also be able to access your superannuation benefits. And if the events were caused by negligence, you might also receive a compensation payout.

These are all horrible life events but that's why you have a wealth protection stack: to cover the bills and provide you with an income when you can't work, whether temporarily or permanently.

There are a number of issues to consider, which may include:

• Budgeting and cashflow
• Managing debt removal or use of offset accounts (an offset account is an accessible bank account attached to your home loan — any deposits, including wages, that are paid into the offset account will reduce the total balance of your loan)
• Restructuring mortgages to maintain access to the capital
• Factoring in the cost of home refurbishments (if required to make your life easier)
• Making deductible or non-deductible contributions to superannuation (Chapter 11 covers Super Strategies)
• Setting up superannuation disability pensions to access capital
• Establishing trusts or other vehicles to provide income and capital flexibility (where appropriate)
• Exploring your own estate planning issues (Chapter 14 covers Estate Planning Strategies).

Without a doubt, a trauma or disability is one of the most stressful and challenging life events that any of us could personally face. An event like this has the power to completely reshape and challenge your original ‘why’. The benefit of a Wealth Protection Strategy payout is that it can help reduce the financial stress while your health becomes your new number-one priority.

Stacking for the next generation

Having kids also delivers a special stacking issue. You not only need to stack for yourself and your partner, but you need to be able to stack to give them the best start you can too.

In Chapter 1, we looked at five truths about money. We acknowledged that our school education doesn't prepare us for our adult financial life. We also acknowledged that our parents, as much as they love us, probably didn't do a great job preparing us for our adult financial lives either in some situations.

So, as a generation, are we destined to repeat the mistakes of our parents (and probably their parents too) or are we going to educate our kids ourselves and show them what good money behaviors look like? Let's aim for the latter!

There are a number of issues to consider here, which might include:

• Starting with the basics: talk to your kids about earning, spending, saving and debt
• Teaching them to respect their earnings through pocket money once they're old enough
• Using technology to connect with them through the use of online saving apps and rounding software for savings plans (phone and app-based tools show them how money works in a language they can understand, given that they will most probably have a phone glued to their hands for years)
• Talking with them as teenagers and young adults about their own ‘why’ (remember, it's their journey, not yours. How many of us would have been nurtured by a parent who took the time to listen and explore our goals?)
• Incentivising them with help such as matching their savings, adding to their savings and rewarding them for a goal they meet over time.

There is an old story around wealth between the generations: the first generation earns it; the second generation keeps it (because they saw how hard the first generation worked for it); the third generation loses it (because they didn't see what the first generation went through to earn it). When it comes to stacking for the next generation, make sure that family values of waste, opportunity and effort are part of the ‘why’ you set for yourself and for your children. And if you are concerned about the next generation, you have a responsibility, if you want to achieve your ‘why’, to equip them with the knowledge they need to thrive financially, or to make sure they seek professional advice.