Failing to plan can leave you in limbo We’ve all heard the conventional wisdom: “Failing to plan is planning to fail.” This long-standing truth hits home harder in our financial lives than anywhere else.
Too many of us live paycheck to paycheck, barely able to cover our bills, yet alone plan ahead for a comfortable life in the future.
In a crisis, we’re rarely ready to cover unexpected expenses that accompany bad fortune. Too often, we need to beg or borrow. Failing to plan can turn minor issues into major events.
Lack of planning leads to missed opportunities.
Failing to plan can be . . . costly, dangerous, deadly
. . . Costly. Try buying an airplane ticket a week before your vacation. . . .
. . . Dangerous. Forget filling an empty car with gas and see how far you’ll go.
. . . Deadly. Delay seeing a doctor and suffer dire consequences, including death.
People who prepare can cover the cost of almost any catastrophe
If we prepared ahead of time for life’s inevitable twists and turns, we’d be better equipped to handle the rough spots. Life’s hurdles like sudden unemployment, major health problems, or huge home repair bills seldom turn into traumas for those who look ahead for unexpected setbacks.
Most of life’s stumbling blocks require some savings to resolve smoothly. In other words, an emergency fund can be stress-reducing . . . possibly life-saving. Folks who haven’t set aside money to keep up their health insurance payments, for example, find themselves in bankruptcy if they fall ill unexpectedly.
Too often, setting aside money for emergencies stays at the bottom of most of our “to do” lists. Instead of waiting for that mythical day when “we have more money,” every household owes it to themselves to set cash aside ahead of time for situations like these:
- Your furnace breaks down in mid-winter; or your air conditioning gives out during a heat wave.
- An unanticipated slump in sales causes your company to downsize, letting you go unexpectedly.
- One of the kids knocks out a front tooth on the playground and needs an implant to replace it.
- You win an expense-paid week at Disneyworld, but can’t afford plane tickets for the family.
“I’ll just put it on a credit card,” you may be thinking. However, adding credit card costs only makes a bad situation worse, especially when interest rates are rising. Best case scenario: Plan and save for emergencies, the inevitable bumps in the road of life.
Manage Your Money . . . financial tips from:
AAM Fee-Only Financial Planning & Investment Advisory LLC
Follow our blog: aamllc.com
Ronald Van Surksum, CFP
4555 Wilson Ave SW – Suite 2 Grandville, MI 49418
Phone: (616) 531-5220 Cell: (616) 450-8439
For permission to reprint: firstname.lastname@example.org 8-17-22