Our parents’ experiences can teach us a great deal about how we should be making plans for our own futures.

My mother, who is now 75 years old and relies on a pension, has seen her food bill increase from R500 per month to R1 200 in just six years – that is a 140% increase or an average of 15% a year.

In comparison, over the same period, her inflation-linked pension has increased by 6% a year, or 43%. That means she has had to find an additional R500 per month just to meet her grocery bill.

So it’s not surprising that when Sanlam surveyed 600 people over the age of 50 about those “life surprises” that had caught them off guard, the cost of living was one of their major concerns.

In the interviews, people spoke about the rising cost of medication, food, electricity and utilities, car insurance and house insurance as some of the costs that had caught them by surprise. “I never thought I would be a chronic medicine user. Everything is expensive, but especially medical aid,” said one respondent. Another commented that “everything has got so expensive that we can’t get by” while others said that the increase in the cost of electricity and petrol every month makes it very difficult for a pensioner.

My mother is, at least, fortunate not to be one of the 40.5% of people interviewed who are supporting someone they had not expected to support. For these people, the financial situation is often dire as they are either close to retirement or in retirement and find themselves carrying the financial burden of someone else’s living costs. In most cases these were grandchildren (44%) and children (43%) – these are family members who, normally, would be expected to support the older generation, not the other way round.

The issue was greater for black respondents with nearly every second respondent unexpectedly supporting a family member compared to one in every three white respondents. The survey also found that males were less likely to support grandchildren and parents than their female counterparts, although men were more likely to be supporting their spouse.

Emotional impact of financial worries

When asked in the survey about “life surprises” most people identified negative surprises. While a few mentioned an inheritance or a surprise promotion, for most, life’s surprises were a source of pain.

When it came to rating the “emotional impact” of these life surprises, financial events such as losing savings or closing down their own business, scored as highly as social events such as a family death, illustrating the extent to which money – or the lack of it – affects our emotions.

Even when it came to major social events such as a death in the family, people often mentioned the financial consequences, for example “my father’s death at a young age left us with no breadwinner” or “I lost my daughter to illness and had to take responsibility for my grandson”.

My mother could have ticked a number of those boxes, especially the negative impact of losing a breadwinner when her children were still young. But one gift my father did give her was a spousal pension – without it she would have been left destitute.

Many people in the survey expected to outlive their partners, the majority of them being women. Of those who expected to live longer, more than half expected to outlive their partners by five years and 20% expect to outlive them by 10 years. The question they need to be asking is whether they can afford to outlive their partner, especially if their partner was the breadwinner. Does their partner’s retirement plan include providing for a surviving spouse?

Get prepared

Life is full of surprises – good and bad – but they can have far less impact if you are prepared for them financially. The majority of those surveyed wished they had saved more of their earnings and had started saving for retirement earlier. More than 80% wished they had done more to be financially prepared for their lives and 74.3% where unhappy about their financial preparations.

In light of the increasing cost of living, being financially prepared is more difficult but you can start by putting a few plans into action:

Start an emergency fund: Many of life’s surprises can be easily dealt with if you have built up an emergency fund. Start small – get R1 000 into a savings account and grow it as quickly as possible to R10 000.

Get rid of debt: It’s bad enough to lose your job, you don’t want to owe tens of thousands of rands on store cards and personal loans.

Cover your risks: Many of the unexpected events listed in the survey can be insured for, such as car accidents, medical cover, disability and retrenchment.

Prepare for retirement: The sooner you put money away for retirement, the less you have to save.

Finish the emergency fund: Once you have paid off your debts and protected against risks, aim to build up your emergency fund to cover three months of expenses.