Personal Finance 

Financial Contingency Plan Series

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Emergency BrakeI’m sure you’ll agree – the best time to plan for a disaster is before it strikes. That’s why, during the Cold War, people built bomb shelters before the bombs actually struck. It’s why people save up emergency funds and keep a home inventory, you want to be prepared so that you won’t be left scrambling in the event of an actual emergency.

How many of your put as much thought into your financial contingency plans as you do for other contingency plans? With a house fire plan, you know that your job is to get out of the building and rally at an external location. What are you supposed to do when you lose your wallet? Call up the credit cards and cancel. Replace your driver’s license. Then what? Have you mapped it out? Chances are you haven’t and that’s why you need to write a step by step plan for what you’ll do if you lose your wallet. Or if there’s a house fire. Or if your car is stolen. Or if your bank account is broken into. Or if one or both of your parents die. Or if your spouse dies.

I know it’s morbid. I know it sucks to think about it but unless you plan for it now, when things are sunny and splendid, you will screw it up when the situation turns sour.

Over the next few weeks, I’ll be writing a series of posts for the Financial Contingency Plan Series addressing what I think are the crucial financial contingency plans you’ll need. The posts will include what you need to do to prepare, what you’ll need to do afterwards, and how often you need to revisit your plan.

Thinking about it won’t make it happen but not thinking about it guarantees you’ll make some bad, emotionally charged, mistakes. It’s unpleasant but it’s necessary.

(Photo: specialkrb)

{ 11 comments, please add your thoughts now! }

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11 Responses to “Financial Contingency Plan Series”

  1. Shirley says:

    Thanks, Jim, I am really looking forward to this series of posts.

  2. SavingFreak says:

    The wallet example brings back bad memories. It felt like that nightmare would never end because I just did not have a plan for replacing everything that was in my wallet. It took me a good month to get it all straight and I have since gone to a money clip with just a few items in it because it isn’t worth the hassle (or the back pain from sitting on that monster!).

  3. It’s not fun to think about, but something we should all prepare for. We have our first baby on the way in 3 months, and we have been talking a lot about getting everything together, especially upping life insurance, creating wills, etc.

  4. Frugal says:

    Looking forward to your articles.

    I have been putting these off and are overdue so timing will be good

  5. cubiclegeoff says:

    Like others, I’ve been putting off most of this stuff, even though we talk about it occasionally.

  6. I’m really looking forward to this series as well. I will tweet them as they come in 🙂

  7. Maddhatter says:

    My wife and I have been talking about this lately (mainly putting together a will). While it can be uncomfortable, it helps us when we remember that not talking and taking action on these things will only make a sad time worse.

  8. cdiver says:

    Sounds great. Bring them on!

  9. zapeta says:

    This will be very helpful! I’m looking forward to the articles.

  10. Sounds like it will be a hell of a series.

  11. dePriest says:

    You’re just so helpful, Jim. I’ll be sure to keep up. By the way, I downloaded an inventory list about two years ago; unfortunately, I’m a procrastinator, and it still sits on my computer, empty. I’ll get on that as soon as daylight arrives.

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