Financial Surprises

Financial Surprises

Have you ever been the recipient of a financial surprise? Maybe you inherited some money from a long lost aunt, won in pull-tabs over the weekend, received an unexpected bonus or raise at work. Wouldn't that be fun? A girl can dream...

But more often, the financial surprise isn't positive. It's negative. Many of us have experienced financial surprises caused by recent events. Possibly you or a loved one has been furloughed or laid off. Or you've been asked to take a pay cut or told bonuses will be down this year, or nonexistent.

I was having lunch with a couple friends the other day and we were talking about how people have either REALLY benefited from everything that has occurred with the Pandemic -- or not. It feels like it has been very divisive. The "have's" and the "have not's".

My parents were contemplating selling their house on Rainy Lake in northern Minnesota. A bit of a hot spot right now since it is far less densely populated than metro areas. In addition, people who normally go across the border into Canada can no longer do that, so this is a great alternative. It took three weeks for them to get an appraisal. Real estate seems to be one of the areas doing well.

Another friend has three restaurants. One is doing okay, one will never reopen and one needs to be completely remodeled to follow COVID restrictions and won't reopen for at least six months.

If you're in the camp that hasn't fared so well, "saving" might seem like a dirty word right now. Hopefully you had that curve-ball or emergency fund tucked away. You know - that extra money that Advisors are always suggesting you have for no real purpose. Money that sits in a savings account generating almost no interest.

Historically, the advice has been to have three to six months of income set aside for the unexpected things that happen. But I think it depends on your comfort level.

In the last month, I had a brake sensor go out in my car (that I've maybe put 100 miles on in the last five months) and a case of Vertigo (yes, I'm too young) that required an emergency room visit, MRI, Dr. appointment to get my blood pressure checked the next day and a physical therapy session. Each situation costing me around $1,000. Certainly didn't have either of those baked into the plan. But I also didn't question if I should move forward with either of them. They both seemed pretty important. So I spent the money. I'm fortunate that I don't have to choose between something unexpected popping up and groceries for the week. Not everyone is as lucky.

A friend shared recently that her step-son is very focused on "keeping up with the Jones's". It's very important to him that the neighbors have a certain perception of what he's capable of providing his family. To the detriment of their financial situation. It might be fun while it lasts, but it's bound to catch up to him. And his entire family will pay the price.

Right now, setting aside any money might seem impossible. I get it. But keep this in mind as you look forward and at some point you have something closer to normal in your life.

Conclusion

If you can get yourself into a situation where you're prepared for the unexpected financial surprises that come along, chances are you will experience far less financial stress in your life. That will probably lead to less fights with loved ones over money. It's truly a win-win situation. Start by thinking small. What's one thing you can give up today that will allow you to start feeling more prepared for the things that might pop up? Because if you do that, you might have more opportunity to enjoy the fun surprises that bring meaning to your life.

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