LSS Center for Financial Resources
Breck Miller, Community Relations Coordinator
Life is good. You have your plans, your schedule, your routine. You know what is coming and are ready for it. You have a six-month plan, a one-year plan, and a 5-year plan all laid out. It may not always be easy going, but at least you know where you are going.
And then…. life happens. It wasn’t in the plan. You didn’t see it coming. But none the less, it’s here and you have to deal with it. Are you ready? Are you even going to survive this?
First, the short answer to that is “Yes”, short of an actual life-ending event, you will survive this. There are things you can do ahead of time, however, that can help that survival be a little easier.
What Could Possibly Go Wrong
Let’s take a look at some of the most common surprises that people deal with:
Tire damage – Your tires are great. You keep them properly inflated. You keep them rotated. You just didn’t see that little screw lying in the middle of the road until it was firmly embedded in your tire allowing air to slowly but surely leak out. Just get it fixed, right? Well, if it is even fixable. If not, you will probably be buying two new tires rather than just one to keep your car driving right.
Utilities and appliances – I once found a trickle of water running across my basement floor. Turns out it was coming from the bottom of my water heater. Since the water is usually on the inside, they tend to rust from the inside out. Lacking X-ray vision, I had no clue it was coming. But like the furnace (winter) and air conditioning (summer), we weren’t going to live without a water heater. That day became an expensive day.
Health issues – But you are young and strong and healthy. Just rub a little dirt in it, wrap it in duct tape, and keep on keepin’ on. Unless it’s a tree branch that falls on your head. I have the scar and medical bill for 10 staples to prove it. Or there is the guy who was moving a stove out of the house across the street. He got a little cut on his hand, the infection went into his blood, and he ended up in a coma. Neither of us saw it coming.
And the list goes on, and on, and on, and………….
In short, no matter how well planned and prepared you are, Murphy’s Law is still in full effect – If it can go wrong, it will go wrong.
What to Do About It
So this is where we talk about readiness to deal with Murphy and his dumb law.
In nearly all cases, we want the building of savings to be right near the top of the priority list. Savings are what save you. When life happens and you weren’t expecting it, having enough savings in place will at least soften the blow of that unexpected event. Ideally we want the equivalent of 3 months of expenses in liquid savings (meaning you can easily access it). That’s a lot to aim for.
Start with something. Start with anything. Just make it a habit to regularly put something in savings. After all, we all know how hard it can be to break a habit. Not a problem when it is a good habit.
How Much Preparedness
And then we talk about risk exposure. While we may not know the exact cost, we can look at the potential.
If you rent an apartment and something breaks, you call the landlord and let them fix it. Less risk exposure for you, so you don’t need quite as much in savings.
New tires for a small car could be $500 for a full set. Drive a big pick-up with big rims and you could be looking at $500 per tire to replace them. More expensive tires mean more risk exposure, and consequently more savings needed to be ready.
But That Sounds Hard
If you are already in a habit of spending what you make, coming up with money to put into savings can seem difficult. The good news is that you have experts who are willing to help you figure it out. The counselors at the Center for Financial Resources love to help people find money in their budget for savings. Appointments are available in-person, over the phone, or over the internet. You can schedule one of those appointments either online or by calling us at 605-330-2700.
written by Breck Miller
images courtesy freedigitalphotos.net
LSS Center for Financial Resources
Consumer Credit Counseling Service | Housing Resources | Sharpen Your Financial Focus | Financial Fitness Education
705 East 41st Street, Suite 100 |Sioux Falls SD 57105-6047
605-330-2700 or 888-258-2227
Strengthening Individuals, Families & Communities