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It also found that the events felt most severely – both financially and emotionally – were financial events such as loss of savings, a business closure or a retrenchment. And it further showed that most people were not well prepared financially for these events.

Here are some respondents’ experiences:

  • “I lost my job because of illness. I couldn’t provide for my family when I lost my job,” Father from Pretoria.
  • “Losing my job put me into uncertainty, and depression followed afterwards,” Man from Cape Town.
  • “My father’s death at a very young age left us with no breadwinner,” Woman from Cape Town.
  • “I lost my house and savings and had to start again at 42,” Man from Johannesburg.

So with the likelihood of something big and unexpected coming your way over the course of your lifetime, what can you do to mitigate the financial and emotional impact of these events? Karin Muller, head of Growth Market Solutions at Sanlam, suggests these five steps as good starting points:

  1. Start and maintain an emergency fund:

    This should be equal to between three and six months of your monthly salary. Remember that you need to access it quickly so an investment such as a money market account is appropriate. This will not solve all your problems, but it will provide a healthy cushion in an emergency.

  2. Have a financial plan:

    Work with a professional financial adviser to draw up a holistic financial plan for your life – in the short, medium and longterm. As part of this process, think through some of the most financially impactful events which you may face – such as loss of income through illness, retrenchment or loss of a loved one who is a breadwinner – and factor these into your planning so if they happen the financial impact is mitigated and in the process, the emotional impact is too.

  3. Have the right risk cover in place:

    This forms part of the financial planning, but is worth talking about separately. Risk cover is designed specifically to help you provide financially from life’s unexpected events. Included in this category of insurance products are life cover, disability cover, severe illness and providing an income if you are unable to work due to sickness, disability or injury. Being able to ensure that your financial needs are covered if a big event takes place is not only essential for your own future wellbeing, it will also protect your family from having to step in and assist if you were not prepared.

  4. Ensure you are saving adequately:

    Unfortunately many people see saving, for instance for retirement, as a grudge purchase when in fact it is a process which actively builds up assets and can contribute measurably to your lifestyle and financial position. Making the right provisions to save is another way that the effects of life’s unexpected events can be mitigated and it can also help you avoid becoming a burden on your loved ones.

  5. Make sure you have an up-to-date will:

    A will protects your family from the fall-out of a big life event. Your will should clearly state what your wishes are so that your family is not placed in a difficult financial position when you are no longer here.

BOX - summary of key findings

  • 78.5% of people claim to have had unexpected life events (good or bad) in either their own lives or that of a member of their family.
  • Just less than a third of the sample (28.2%) expect to outlive their partners.
  • Of those who expect to outlive their partner, the majority (35.0%) are uncertain about how many years longer they will live, but just over a fifth (21.4%) expect to outlive them by between five and 10 years and 29.7% say they expect to live for more than 10 years after their partner dies.
  • Over half expect to live well into their 80s but only 1.3% of believe they will live to be over 120.
  • Most expect to die of old age (46%) or illness (13.8%).
  • Half the sample (49.5%) reported a death in the family as being the event that has had the biggest emotional impact on them.
  • 97.2% of those that lost savings or pension savings rated this event as having a devastating or high financial impact, whereas 93.7 % of people that faced the closure of their own business rated the financial impact as being devastating or high. 89.2% of people that lost their income or were retrenched rated this as having a devastating or high financial impact.
  • People find themselves largely unprepared for the financial impact of these events.
  • 40.5% currently support a family member that they were not expecting to support. Grandchildren (44%), children (43.6%), extended family members (20.2%), parents (12.8%) and spouses (11.1%) are cited most as having to be unexpectedly supported.
  • Respondents have many financial regrets - 74.3% of the people surveyed would change something in their financial preparation and 82.3% wished that they had done more to be better financially prepared for life.
  • Things that they would change: to save more of their earnings (54%), start saving for retirement earlier (47.5%), provide for unexpected life events (43.7%), spend less (42.6%) and get advice from a financial planner (14.3%).
  • Over a third of the sample (31.7%) got their financial advice from a financial planner, but 28.5% did their own research and planning, and 23.2% got advice from their parents or no-one (21%).
Sanlam Life Insurance is a licensed financial service provider.
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