Three Aspects of Your Financial Situation That You Can’t Control
There are many things that you control about your life. You can control what you eat. You can control when you go to sleep and when you wake up. You can control certain aspects of your financial situation, such as how you budget your money, and what you plan on for income and expenses.
But, especially when it comes to the economics of your standard of living, there are things that you can’t control. Your best idea is to prepare for them so that they don’t hate you as hard as they might otherwise.
A few examples will showcase the importance of preparing for unknowable events. If tragic circumstances occur to you or your family members, like wrongful death, your financial situation can change rapidly and dramatically. If a natural disaster affects your home or your community, something similar can happen.
A third example will be if you are the victim of fraud or theft. There’s no way that you have control over bad actors hacking into your financial accounts, so you can only know how to try to prevent it or deal with it afterward quickly and efficiently.
If a wrongful death occurs within your family unit, not only is it a tragic emotional event, but it can also have serious economic consequences to you as well. If the person who died was the primary breadwinner in your family, what do you do to replace the piece of that financial puzzle?
Sometimes insurance can help, other times, you have to figure out how to rearrange your life accordingly to maintain the standard of living that you’re used to. Car accidents fit in this category as well.
If you live somewhere that there is the possibility of a natural disaster, then you know that you should insure yourself against it. But not everybody has the money to do this. For example, if you live in a floodplain, eventually your home will get flooded.
If you don’t have good enough insurance to cover the costs of repairing your home, you may find yourself in a position where you lose a lot of the value of your financial portfolio. Other natural disasters might be tornadoes, earthquakes, fires, or hurricanes. You probably have a grocery budget set up for monthly expenditures – it is less likely that you have a natural disaster fund at your disposal.
Fraud and Theft
If you the victim of identity theft or some other type of fraud, it’s incredible how quickly your financial situation can change. If someone gets ahold of your credit cards or your bank account number, it can wipe out your savings in seconds. Because of this, checking in daily with all of your financial institutions is a good idea.