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Hurricane Ian hit Florida not too long ago. It left a mark. Thousands of miles of debris, flooding, and destruction. Millions of people with damage that will take months to repair and possibly a year or two to overcome.
I've lived through hurricanes. Hurricane wind rips roofs and causes incredible damage. They dump buckets of rain.
In the lead-up to a hurricane, people express fear. It is understandable.
In our financial lives, we have fears. Fears of being unable to retire. Fears of not having enough money to live on in our elder stages.
In a disaster, insurance claims may be denied or delayed. This means homeowners will be responsible for repairs.
Emergencies can strike at any time. I stress maintaining as sizable an emergency fund as possible.
The key is not to fear but to prepare. You won't be able to control everything that happens to you.
You can't predict what forces will come your way.
There is no way to know when or if a hurricane ever visits you. There is no way to know that your child will need a costly surgery, and the insurance won't cover a sizable portion.
Here are a few strategies that have saved me on several occasions.
Prepare When Things Are Going Well
When life is good, money tends to vanish like a magic trick. Our wallets and purses become sieves. We act as if the money will continue to flow and nothing terrible will happen. Let the good times roll.
This is the best time to plan. When you are healthy and young is the best time to buy life insurance. It becomes more difficult as you age and develop morbidities.
No one plans on developing diseases as we age. We hope to live into our 80s and pass away in our sleep.
This is not usually the case. Many issues may arise. It is up to us to prepare well before the storm. The better we prepare, the less we fear.
I took opportunities when I could to increase my workload and income temporarily. Paying off car loans and closing all our debt was the goal. Afterward, I stacked more into the emergency savings.
Then came the hurricane, the mold in our walls, and the forced kitchen remodel.
That money proved to be a lifesaver.
Develop a Plan
Create financial plans for various situations. What would you do if you were in the hospital for a few weeks? What if you could no longer work full time because of a physical ailment?
What happens if you lose your job? What is the plan if a family member needs special care?
You will never remember everything you need to do in every situation. It is also difficult to act in highly emotional, high-pressure situations.
Instead, develop your plan in the calm of the good times. This allows you to think through potential pitfalls and provide solutions rationally.
Every elite professional has a plan for difficult times. You won't be able to plan for everything. But a plan can cover many things and overlap with others. If you fail to plan, you plan to fail.
Plans help eliminate emotional actions, reducing critical errors.
Seek Guidance
In a previous post, I discussed the importance of a financial coach. This situation is no different. You could benefit from a mentor who can help guide you through difficulties.
It doesn't have to be a financial advisor. It must be good with money.
Everyone has advice, and many of these advice givers are not financially secure. Choose who you listen to carefully.
Do not be afraid to ask for help and advice.
Most successful people tend to enjoy providing advice. You can follow Youtube channels, listen to podcasts or take financial courses.
Continue to educate yourself about the economy at large or your situation. Always know where you are financial.
A mentor can help you keep your commitments. Committing to specific actions with them makes you more likely to follow through.
What's Next?
Don't panic; prepare. You make the best preparations you can. By preparing, we give ourselves the confidence to face the oncoming storm.
Prepare in the Summer for the Winter. Like the ants collecting food during favorable weather, they can hunker down for the winter's biting cold.
Develop a plan. Planning in good times allows for better decision-making. Again, during the calm of good times, you plan. This eliminates any thinking during highly emotional situations.
Seek guidance. Find someone to help guide you on the journey, someone with experience and knowledge in the subject. We don't have all the answers, so it's okay to crowdsource knowledge.
Always be prepared for what life has to offer. Do the best you can with your resources. These three tips have helped me tremendously. I hope they help you too.