Everyday, people lose their jobs, become seriously ill, and suffer other hardships that strain their household finances. Even so, a sobering study by State Farm found that 55 percent of those surveyed don’t have a back-up plan for weathering a long-term financial crisis that may occur due to unexpected circumstances. I have three back-up plans: a) adequate life, health, home and auto insurance; b) an emergency fund with six months of living expenses; and c) albeit small, a secondary source of income.
The bottom line: Life happens. It’s your responsibility to prepare as best you can for whatever it throws at you.
Photo Credit: US Army Corps of Engineers Public Affairs
Great post, especially the “Bottom Line.” Working in a credit union we see daily what happens when folks do not have a plan or take to heart that it is their responsibility when stuff happens.
Stuff always happen and having some reasonable plan to handle it allows me to sleep at night. In addition to the usual insurance, I have built up a lot of sick time (over 100 days) which I can use for retirement in 6 years. Keep a low cost lifestyle also helps if something happens.
Yeap, have a back up plan. Even if it involve moving back in with your parents.
*Chuckle* Good idea, except I’m 86 …
@nansuelee: I’m glad you enjoyed it — I hope it wasn’t too long. 😉 Seriously though, like I said, although some catastrophes will overwhelm us no matter how much we prepare, I still believe it’s our obligation to do the best.
@krantcents: Sweet deal if you can get it. I think my employer allows us to cash in 25 percent of our unused sick time upon retirement.
@40: LOL! I guess that is a back-up plan, isn’t it?
It was interesting, I was having a conversation with a co-worker from India one day at lunch. I had a hard time understanding him, but I think he said that where he is from, it is a given that people all focus on having a secondary income, just in case something happens to the first income. Very interesting that it is just a given that a second income stream will be created by one person.
Problems can and do happen in people’s lives. While the chance of any one problem might seem small, when you mathematically assess the chance of just ONE of them occurring, it’s a different story. Stuff happens. So be prepared, even though you might not know exactly what might be coming down the pike!
Yes, those probabilities do add up, Wise Squirrel. The odds are we’re all going to get hit the “reverse lottery” at least once or twice during our lifetimes, so it pays to be prepared.
I couldn’t agree more! I always like to think of the worst case scenario, and how well prepared I am to cope with it.
Losing your job, getting sick or growing old is expected. The chances are that someday you will lose a job, get sick and since the alternative to growing old is unacceptable, I suggest you plan accordingly. As a planning device you should ask the question, what would I do if I had to leave my country at a moments notice and relocate to a country where I had no money and didnt speak the language? This was the situation most Cuban exiles from the 1960s encountered. We as citizens of the United States dont think about things such as this because of our global status, but to many in the world it is very real. If you can answer that you would be fine given this extreme scenario because you would have either created access to funds or you have a readily transferable skill then you are way ahead of the game. I congratulate you. If not, its time to get moving.
It’s better to have plan B, C, D, and so on. Nowadays, the only best thing to do is to have back up plans because what we plan doesn’t happen all the time.
One of the blessings of a good marriage is the “backup” each spouse is for the other.
Several time in our 53-year-marriage, my wife left her own pursuits to earn extra money for awhile.
… and when you are old, the most important product of your marriage (if God gives you the gift of them – I could write reams about gifts of God as “backup”) are your children. Each member of the family is backup for all the others.
I’d just add that, even if you are insured, an umbrella policy can be a good idea. You can get millions of dollars of coverage over and above your regular policies for a few hundred dollars per year.
Sometimes we think we’re invincible until one day when, like you said, life happens! It’s always best to be safe than sorry!