Financial Literacy – 9 Life Events that Cause Financial Insecurity

Financial insecurity often stems from significant life events—some anticipated, but many unforeseen. These events can leave consumers feeling overwhelmed and uncertain about their financial future. Here, we explore nine key life events that can drastically impact a consumer’s financial situation, emphasizing the importance of understanding and addressing them effectively.

The following is a preview of the life events included in our comprehensive training and education programs on financial literacy. Learn more about our educational resources and programs for call center agents and banking customers here.

9 Life Events that Change a Customer’s Financial Situation

Financial literacy can be the difference between navigating a life event with confidence or succumbing to financial panic. Our goal is to equip both call center agents and their customers with the knowledge needed to make informed, long-term decisions during challenging times.

By recognizing nine key life events, understanding their impact on a customer’s financial insecurity, and applying the right strategies, banks and their customers can face these changes with greater clarity and control.

The nine life events are:

Parenthood

Parenthood is a rewarding journey, but it also brings new responsibilities and costs that require careful planning. For some, the financial strain may begin even before the arrival of a child, such as through unplanned medical events.

As parenthood brings lifestyle changes, increased demands on time, and significant financial obligations, these expenses can add up quickly, requiring careful budgeting and sometimes seeking additional income sources.

Divorce

Difficult life events like divorce uniquely impact a customer’s ability to repay debts. Divorce can lead to asset division, legal expenses, and reduced household income.

Marriage

When customers get married, they often seek guidance on financial changes like opening joint accounts, consolidating debt, or managing wedding expenses.

Unemployment

Unemployment is an incredibly difficult time for most, often involving feelings of despair, inadequacy and loss.  It results in lost income and often a high reliance on credit.

Illness

When a customer is going through an illness it can be emotionally, physically, and financially devastating.  It can take over almost all aspects of their life and often results in increased costs as well as a reduced capacity to earn income.

Loss of a Loved One

Bereavement whether anticipated or sudden, can rattle someone’s foundation.  Grief is so complex that there is no one single way to manage it. During this emotional time, people have to face the financial ramifications of losing a loved one, such as funeral costs, loss of an income stream and determining how to handle joint debt.

Caregiving

Caregiving is any situation where a customer is responsible for the health care and often expenses of a person who cannot care for themselves. When someone is providing primary care to someone with an illness, this can take over almost all aspects of their life including work hours, ability to earn, additional financial burdens and emotional strain.

Retirement

Retirement occurs when an individual stops working regularly and begins claiming their retirement fund as their primary income source. Complications occur when planned retirement savings are unlikely to be sufficient, retirement is forced earlier than planned or increased costs result in savings being inadequate.

Victim of Fraud

This is an increasing reality for many, where savings, income or lines of credit are subject to fraud, resulting in significant challenges in trying to recoup what they can, while adjusting budgets and finances as a result of the impact.

Key Signals of Financial Insecurity and Solutions to Help

Financial literacy also includes the ability to recognize when a customer might be facing financial insecurity. Below is a glimpse of our training module that compares key signals of financial stress with common solutions.

What You Can Do: Empower Customers and Agents with the Knowledge Needed to Handle Complex Life Events

Training and education programs can give your agents and customers the understanding of how each unique life event influences an individual’s finances.

In collaboration with CBS Academy, we’re excited to offer online, on-demand credit health education for consumers and financial literacy training for call center agents. Our training covers the financial implications of key life events, their effects on credit scores, and strategies to regain financial stability and credit health.

The consumer education can be completed in about 10 minutes, with a knowledge test, downloadable completion certificate, a suite of online resources to refer to and a downloadable interactive budgeting tool.

Our agent modules go into more detail on how to support customers through life events and their impacts with a total of 10 modules.  These provide effective communication strategies to support customers, take agents through role plays and include an assessment at the end of each module to test learning.  It prepares agents to support customers through their toughest times, make conversations more effective, and build customer loyalty and advocacy.

Visit our Financial Literacy info page to learn more about the programs.