What's your Backup Plan?

What’s Your Backup Plan? by Jackie Beck

www.Moneycrush.com

Planning is key to so much of personal finance — it’s how we get ahead and stay ahead. Without planning, we just scramble to react, or make decisions that can be bad for us because they aren’t well thought-out. (You know how it is when you’re forced to give an answer quickly, and then later you think of something better you could have said or done…) But it’s not just planning for things you want to have happen that matters. You’ve also got to plan for the what ifs; the things you actively don’t want to have happen.

Creating a good backup plan

You’ve got to create a good backup plan — at least for the common scenarios that many people encounter throughout their lives. What would happen if you lost your job today? What if you came home and your spouse had left you? What if you got into a car accident and needed to be hospitalized, or even died?
Think the scenarios through. If you find yourself short on a good answer to those questions (and stuff like “Well, I’d live on credit cards” isn’t a good answer to losing your job), take this as an opportunity to lay out what your ideal backup plan would look like. And then take steps to get there. For example, if you don’t know what you’d do if you lost your job, think about what you’d like to be able to do if that happened. Find another job, right? And be able to pay all your bills while you’re unemployed without worrying?
Then think about what you’d need to do to make those desired outcomes happen. (Polish up your resume, network regularly now, come up with other ways to make money, get an emergency fund going, etc.)

 

Thank you Money Crush, Jackie Beck for this great article on What's your Backup Plan?