S. Alexis Grason, Senior Financial Advisor
“Alexa, what’s the weather going to be like today?” I hear this question almost daily, as my daughter wakes up and submits an inquiry to one of our tech boxes. She uses the familiar, reliable robot’s voice to instruct her outfit, which is important during this in-between season as the temperature starts changing.
If you live in a climate that has the 4 distinct seasons, this time of year morphs all that is gray and brown into lush greenery and blossoming flowers. It’s miraculous. As I get older, I find myself appreciating the subtle changes from day to day and anticipating them with butterflies in my stomach.
Life presents the same seasonal changes, but the stakes are much higher, and the resulting butterflies can be physically and psychologically crippling at times – but they can be simply beautiful at others. The storms are mixed in with the spring flowers.
- Unexpected divorce
- Starting a business or changing careers
- Dramatic but desired search for a home and moving
- Needing to fold caring for a family member into your existing routine (and budget!)
- Death of a loved one
- Deciding to send your child to private school
- Diagnosis of a terminal or chronic illness
- Getting married…again
- Having a child after many fertility treatments or miscarriages
- Competing priorities of daily expenses changing to gifting and legacy dreams
There is one cornerstone of all these events that can rattle the ground you walk on or can make for solid footing: money.
If you can build a rock solid foundation for your financial house, then when these events occur, you’ll be ready to be adaptable, resilient, and strong.
Mixed bag of savings
Not just one type of savings but multiple! You need to have cash on hand, investments socked away for the long-term, and investments available for the intermediate term. Increase your resilience by protecting against acute storms derailing the next 5 chapters of your life! Here are the main buckets of savings:
- Cash (approximately 3-8 months of living expenses depending on your specific situation, job security, amount of income earners in the family, etc.)
- Long-term savings (a.k.a. Retirement savings) including a tax-free bucket, if possible
- Intermediate term savings (brokerage account that is NOT a tax-qualified retirement account, so you won’t incur any penalties for early withdrawals; this type of account also currently receives favorable tax treatment on long-term gains)
Protect what you cannot afford to lose
My husband was recently injured in a mountain biking accident. One of my first steps was to remind myself that we are adequately insured. I definitely cannot control the tricks he attempts on his beloved bike, but I can control how we’ve prepared for any accidents that may ensue. This means having the right combination of coverages for your situation and re-evaluating as your situation changes.
- Property and Casualty coverage (homeowner’s/ renter’s and automobile coverage), including an umbrella policy
- Disability coverage – If you have earned income and an accident or disability causes you not to be able to work, your entire future would be thrown off course. The government will not rescue you and your employer provided coverage may not be as comprehensive as you think. Do your homework!
- Life insurance
- Long-term care insurance
Depending on the level of the wealth you have built, you may be able to self-insure some of these risks. This means you willingly and intentionally do not transfer the risk to an insurance company. You’ve decided that you have adequate resources to protect you and your family should one of these events occur. Always do the math to be sure you are comfortable with what might be needed according to the odds, statistics, and probabilities.
Build a Professional Team
Have your trusted resources already in place before you need them. This doesn’t mean you have every possible professional on retainer, but it does mean you’ve built relationships with a trusted few that you can turn to. You want them to be the quarterback(s) of your team so if you need some of the ancillary resources, you’ll know who to ask. Don’t forget to keep your mental health a priority too!
- Financial Planner who is a CFP® (not all are created equal)
- Estate Planning Attorney
- Lawyer (general practice)
- Real estate team (realtor and mortgage consultant)
- Your mastermind group and growth counselors – your Personal Board of Directors!
Life’s seasonal changes are beautiful, crippling, or somewhere in between. You cannot separate the good from the bad in life, but you can be financially prepared so you can give yourself options and flexibility. The goal is to keep you in the driver’s seat of your life!