The recent financial turmoil at Wasps and Worcester has shocked everyone in the rugby world, and proved that there are very few certainties when it comes to financial issues and business planning.
With good reason, fans of both clubs, like any other club in the country, probably assumed a settled future of Saturdays supporting their side.
After all, both clubs have come through changes and challenges before, Wasps during their move out of London, and Worcester immediately before Cecil Duckworth rode to their rescue 25 years ago.
So, there was no pressing reason to think that the outcome of more recent financial challenges would be any different. But sadly, when the cold winds of financial reality hit, they can cause massive upheaval, and both clubs face an uncertain future.
As it is with rugby clubs, so it also is with your own financial future. An unforeseen event, or an unfortunate conflation of specific circumstances, can blow even the best-made plans off-course.
Such events are hard to predict. But, there are some simple steps you can take to help protect yourself and your loved ones should the unexpected happen.
1. Be prepared for a financial emergency
Financial emergencies can take many forms. The simplest involve some kind of household crisis, such as a broken boiler or storm damage to your roof.
More extreme circumstances could be a sudden loss of income through unemployment or a business failure.
In all such cases, it makes good sense to have an emergency fund on hand to help fill the short-term gap in your finances. The availability of such a fund can save you having to resort to expensive, short-term borrowing to fill that gap, especially with interest rates on the rise.
A standard rule of thumb, is that your emergency fund should amount to between three and six months of your household income. You should keep it in an instant-access savings account, so it is readily available if you need it.
2. Have a financial plan in place
Although you cannot predict if, and when, you may be faced with an unexpected financial event, having detailed plans in place regarding your wider finances can help you feel more confident that you will be able to cope, should something untoward happen.
It can also help you identify any steps you should take to improve your resilience in the event of any such crisis.
The two important things to remember when putting your plans together are:
- Ensure your plan is as thorough as possible
- Regularly review your plan, at least annually, to ensure it remains fit for purpose.
The latter point is particularly important. As your circumstances change, so should your plan, especially after key events, such as marriage or the birth of children.
3. Protect your loved ones should the worst happen
Your own mortality is hard to think about.
Even so, it is important to consider what would happen if you were to die, leaving your loved ones to manage financially without you to provide for them.
There are some simple steps you can take to help them, such as:
- Making sure you have a will in place. This will ensure that your wealth passes to who you want it to, rather than be subject to lengthy legal wrangling.
- Keeping your financial paperwork up to date. You do not have to be obsessive about it, but just keeping your affairs in order will make it much easier for your family.
- Setting up life insurance that pays out a lump sum to your family on your death. At the minimum, this should be enough to clear your debts, including any mortgages.
While it may be sad to think about, it is often better to plan for this worst-case scenario than for it to happen with no plan in place.
4. Maximise your savings while you can
Even the longest playing careers come to an end at some stage, and are likely going to be around 15 years at best. So, it is important to maximise your earnings potential and save as much as you can into long-term investments and pension savings, while you have the means readily available.
The power of compounding, giving you financial growth on growth, means the sooner you can start saving and investing, the sooner your money can start working hard for you.
5. Secure your future after your playing career
Following on from the previous point, it is important to make sure you have a plan in place for your working life once you finish playing.
At some stage you will know it is time to hang up your boots. When that time comes, you will need to ensure your financial future is as secure as possible.
As with most key events in your life journey, planning ahead is everything. So, it is worth having a good idea of your future career plans and ensuring you have the training, qualifications, and financial plan in place to help you move forward with confidence.
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For expert guidance on protecting yourself against unforeseen financial events, please contact us. Email email@example.com or call 01625 529 499 to find out how we can help you.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.