Life is hopefully a long and healthy one. It also never hurts to be prepared for dire times. A crisis is defined as “a time of intense difficulty or danger”. It is usually sudden and out of the ordinary. More often than not, it requires a large chunk of money to get resolved. Are you prepared for these scenarios that will be sure to happen sooner or later?
Are you prepared for dire times and crisis financially?
I am going to use Thailand for the purpose of illustrating a point. The ruler of Thailand, King Bhumibol Adulyadej passed away a few years ago after a long illness. He was a much-beloved king who had ruled for over seventy years. His death devastated the Thai people. The whole country was in a state of mourning for the next year.
Civil and state officials were ordered to wear only black clothing for the next year as an homage to the king. No doubt his heir will be well taken care of. What does this all have to do with you? is what you’re asking yourself. The answer is… plenty when applied to your life.
As part of the mourning process, most places of business were shut down for thirty days. This means shops, clubs, and even the red light district shut down and remained shut for days, if not all of the month.
While this is an extreme case and something that probably wouldn’t happen in first world countries, a crisis can impact your finances by disrupting your business and your life. For instance, it means a lot of lost revenue for Thai merchants who run businesses.
Having to buy black clothing is also sure to be a drain of finances. If something dire happened to you, would your loved ones be okay? I don’t mean to be morbid, but it’s something l started thinking about recently when l read about the two sisters who died under mysterious circumstances while on vacation in Seychelles.
When l heard about the king’s passing, it also brought it to the forefront as we were soon leaving for a little trip which will find us in Bangkok still within the 30 day mourning period. The impact for us is little of course as tourists. I just have to make a slight adjustment in the clothing l was planning on wearing and opt for more muted colors as advised for all tourists.
Preparedness:
All businesses depend on customers. It might be a big business, it might be a single operator like a blogger making money from a particularly big sponsor. Just recently, the Mode Media company shut down out of the blue. A company valued at 1 Billion dollars! A lot of bloggers were left owed thousands.
Some were owed in excess of $30,000! for work that had been done but invoices not paid. A lot of people don’t remember the dire times after Enron went into bankruptcy, essentially ruining the lives of its hundreds and hundreds of employees. Gone were their pension plans, their 401k plans and life as they knew it.
If a business you depend on fails due to no fault of yours, are you prepared? Do you have enough money to ride out the bad times? Are you sure you’ll be able to put food on the table for you and your family? Do you have an emergency fund? What is your Plan B?
As a result of everyone in Thailand wanting to wear black for mourning, the retailers were running out of all-black clothing. They truly couldn’t keep any black materials in stock. Most had been reluctant to order black because they didn’t want to bring bad luck to the king.
Some forward-thinking and realistic ones had stockpiled black clothing and sat pretty. They had a Plan B. While one should not go around wishing bad things, it is certainly good to be prepared. For you, it might mean making provisions for your children or spouse in case anything happened to you. Have you assigned a guardian? Do you have a living will?
Insurance is a must: Are you prepared for disaster?
It’s always a good thing to put your financial house in order. Do you have insurance for your loved ones if anything happens to you? The king’s death got me thinking as well. It’s an unpleasant thought, but it’s something that needs to be done for your peace of mind. It is your responsibility to make sure your family is provided for in case anything happens to you.
I am not perfect, and l certainly don’t have all the answers. I used to have life insurance when l was still in the regular working world. It was provided by my company and l could raise the amount of coverage for just a little amount, which l did. It might do you good to check and see if your company offers such a perk. If not, it might be a good time to start thinking ahead like l am now and trying to find the best plan.
There were a lot of tourists in Thailand right now who were complaining because the royal death has put a cramp on their holiday plans. They had come to party, drink, and muck up the place. Now, they are forced to be respectful and wear somber colors as a sign of respect.
Travel insurance is also another great thing to make sure you have when you go away. There are tons of horror stories out there. If something happens to you while traveling, you want to make sure that you will be returned home. If there is any sort of political upheaval that prevents you from traveling, it’s also nice that you won’t be out of money. That is something l find worth paying the extra $ for.
Emergency Fund:
This goes by many different names. The whole point is to have enough money to ride out the bad times. The amount is different for all. If you have an easy-to-find job or specialty, you may not need as much as the next person with a hard-to-find job.
Are you prepared financially or do you plan on credit?
Some people depend on credit cards as a source of emergency money. That is a whole different post itself. Most experts suggest three months’ worth of living expenses. Your first step of course should be to get your current financial picture. This will point you towards your strengths and weaknesses. Making a budget and figuring ways to lower your spending so you can shore up your finances is always a good thing.
One of the things we did was to eliminate our credit card debt. It involved me picking up extra shifts and my husband getting another job as a waiter, but we did it. I don’t care how low the interest rate is, or how it helps your credit score by actually having a balance. It is so easy to fall into that trap, but extremely hard to get out of. Trust me, l had 25 years of experience with that.
Do you have your Plan B ready? Are you prepared for dire times and crises financially? If so, what did you do? If not, are you planning to?
Having a financial plan is so important. We have all faced hard times and found ourselves in precarious situations. As I have seen others deal with such challenges and difficulty I have been insistent to make sure my affairs are in order. Thanks for this reminder to reevaluate my plan and update it as necessary.
It certainly is. I need to do a better job myself and keep things updated, because s**t happens. I think we avoid it because it makes us face our mortality, but we gotta do it :-).
In my heart I want to say no. I do have life insurance with my job and I pay for an extra. I have plenty of money saved up for the kids so I can pay cash if something every happened to them. I don’t have a solid will in place and I don’t have 6 months of income saved and chilling. I need to work on that.
You’re way ahead of a lot of people with just the life insurance 🙂 . A lot of people don’t take advantage of it, especially when they can get it through their jobs and it really is inexpensive to top it off. Saved and chilling.. I like that.. 🙂 . I need to work on the will, as unpleasant as it is.
This was a Really great read! I think about this all the time since I live abroad in the Middle East and never know what the future holds in this region. Also, I have to consider having an emergency fund for special cases, if need to buy a last minute flight back home for a family emergency or what have you. Thanks for these tips and reminder.
Yeah, it gets moved up for us too since we live abroad. There is so much stuff to do and l think about i more when l need to get on a plane :-). Uncertain times, especially over there can be a concern like you say. Plan B needs to be on the table. 🙂
Definitely some areas where I need to improve. I do believe in having an emergency fund, but you can never be too prepared. Thank you for always sharing great info!
Thanks for reading 🙂 . Everyone always has room for improvement. Even though l don’t have all the answers, at least talking about it and researching is a start. I need to improve on doing a will for sure :-).
Good, timely advice, KemKem! We never when we’ll experience financial crisis, so it pays to prepare for lean times. I know that we need to put more aside in savings. What I really need to do is prepare a living will. By the way, I feel terrible for those bloggers who won’t get paid. That’s terrible!
I know it sucks for them. Doing work and not getting paid, and more than likely putting them in financial crisis. An awful thing :-(. It definitely pays to be prepared. The will is something l have to do as well. Uncomfortable, but it needs to be done. PPPPPP = Proper planning prevents piss poor performance :-).
This is great read and as a travelling nomad these are things I need to put into action now!
I have emergency funds and insurance but i need to bookmark this and thank you for the great and informative post.
For us travelers, travel insurance is a good thing. You’re ahead of the game with the funds and insurance 🙂 . We can always do better to prepare though..right?
Great advice! Everyone needs a financial plan B because you never know what’s around the corner. Travel insurance is a great investment.
Yes, it’s worth it. I always grumble when it’s time to pay for the travel insurance, but it’s definitely worth it. Love Plan B’s and C’s 🙂
As crazy as it may sound a job loss. No. a death yes. My hubby and I sought out insurance when we were dating and living together to make sure things would be handled and the kids would be fine and all that. But like most people we don’t have the savings we should.
That is kind of crazy, but everyone has to do things according to what sounds good to them. It does make sense though emotionally. Taking care of the kids was and should be a priority. Savings are hard because there are always so many bills. The tricky part is trying to work the allocation so one doesn’t feel the money, maybe an automatic deduction.
Great info and sadly, I am behind the 8-ball. Printing this one off.
It’s never too late 🙂 . A lot of this stuff is quite uncomfortable to think about and act on, but you gotta start somewhere. Hope this helps.
Love your thoughts on an emergency fund. Credit cards are not emergency funds.
No, certainly not :-). It’s very tempting of course..but you suffer later :-).
I am in active saver. My husband is a financial planner. This is very helpful in our household!
Nice 🙂 . Very convenient. It helps a lot when both sides are on the same page doesn’t it? Very nice!
So true and so on point. I have been getting more serious about my funds and definitely want to build upon my savings. I had a plan in case things went for the worst while I was in Europe, but tomorrow isn’t promised at all and preparation is key.
You nailed it. Preparation is key. I remember how stressed l would get when a mini crisis appeared and had no funds to remedy the situation. Now, l’m like..okay..how much is it?..Boom! It took a lot of time to get there, but so worth it in the long run. You can do it :-).
I tell people insurance is so important you just never know! I want to grow my own emergency/saving funds for a rainy day I am trying to get it to a couple thousand!
Insurance really is important, especially in the U.S where the costs are astronomical . It sucks when you’re first starting to do it, but the money grows, and at a certain point..it’s like wow! I really did it. Just start small and it will snowball. Good luck!