Good Planning Means Expect The Unexpected

We have the ability to handle and predict much of the potential dangers we might encounter, at least in a financial sense.

We have the ability to handle and predict much of the potential dangers we might encounter, at least in a financial sense.

The devastation to life and property is tragic in every sense. It is an eye-opening reminder that we are subject to the whims of nature in a most terrible way. There is very little difference that any level of planning can make given the ferocity of certain storms—it is plainly evident and the cost in both human and financial terms is inestimable. In other words, even if the idea were present in advance that a storm of Harvey’s magnitude might hit, there was nothing that could have prevented the disaster or lessened the damage substantially.

The same cannot be said for many aspects of our financial lives. We have the ability to handle and predict much of the potential dangers we might encounter, at least in a financial sense. Some of the biggest life transitions with financial consequence we face are:

  1. Death
  2. Disability
  3. Loss of job
  4. Divorce
  5. Need to support family member
  6. Acts of Nature

Obviously, a boatful of money in your accounts helps, but let’s face it, not everyone is flush with money—and more importantly, not everyone has the ability to mentally deal with the devastation attached to these big life changes. So, let’s devise a plan that puts you on the path towards handling as much as possible in the event that any of these situations arise.

Here are some ideas to ponder:

  1. What is the likelihood of occurrence?
  2. Is there anything you can do to prevent the situation?
  3. What are the financial ramifications?
  4. What steps can I do, beginning today, to prepare?
  5. Who supports my efforts?
  6. Who is missing from my trusted circle?
  7. What can I do to become more resilient?

Assuming you’ve crossed the bridge of why this is important, you should begin to address and act on the 7 questions. The action might entail taking a very thorough inspection and analysis of your insurance coverages.

A question to consider: If I die, become disabled, someone in my family becomes very ill or my house burns down; how am I protected financially and where am I not?

Waiting for disaster to strike is not the time to start planning. Planning is a proactive, pre-occurrence exercise of “what if’s” and action constantly being questioned, tested and improved upon. Your values determine the ideas on which you place importance and how much effort you put into creating solutions.

Life transitions, with adequate preparation and support, can be manageable, at least to a degree. On the contrary, without advanced preparation and support, they can devastate you and your family. For example, the unexpected death of a loved one creates incalculable pain and suffering on a multitude of levels. If an adequate amount of life insurance is in place, the financial impact of the loss can be somewhat mollified instead of being an add-on to the pile of misery.

Resilience is a human trait that is vitally important in dealing with the stresses, problems and tragedies in life. You can have all the money in the world, but without a sufficiently developed resilience ‘muscle,’ you are more likely to flounder in misery. There are some great resources available, like “Option B: Facing Adversity, Building Resilience and Finding Joy” by Sheryl Sandberg and Adam Grant and “The Resilience Breakthrough: 27 Tools for Turning Adversity into Action” by Christian Moore.

The case of a job loss is an example of where planning and preparation may help lessen the impact. Consider the following and begin taking action if needed:

  1. What is the state of your industry and your place in it?
  2. Are you financially prepared for work interruption?
  3. Do you need additional training or skills to remain competitive?
  4. What can you do today to improve your chances of remaining in place, changing to a better situation or being prepared for transition?

You see, there are some aspects in our lives we can control, like proactive steps and actions that provide peace of mind, and there are other inevitable aspects that we cannot control in any way. Putting our heads in the sand and believing that we are impervious to difficult life transitions is just plain unrealistic.

Transition planning is, like eating the proverbial elephant, something to do one bite at a time and not in one impossible swallow. Begin with an examination of potential threats and then build a team to help you move forward. It’s not perfect, it’s not waterproof, but it’s a start. Take your first step now!