Life is full of ups and downs that have financial implications. How we respond to different circumstances and situations has a cumulative effect over time, which can lead to significant differences between people in terms of their financial outcomes later in life.
There are many things that go wrong in life - poor health, redundancy, business failure, death of a family member or the end of a relationship. Often these events are interlinked. Death of a family member can lead to business failure and the end of relationship can lead to poor health or redundancy can lead to the end of a relationship.
Significant adverse events are financially destructive. Mostly, they are not within our control, but we can certainly control how we respond to them.
Along with adverse events come grief, a sense of loss and, initially, denial. This manifests itself mostly as not wanting to let go of a previous lifestyle, particularly the family home, but also small things such as expensive clothes or subscription TV that are no longer affordable in the short term. Reluctance to give these things up leads to a worsening financial situation.
Acceptance of being in a new financial situation is the willingness to let go of the past and to be able to contemplate travelling down a new path.
