We all know how important financial planning is. However, there are some things that can get in the way of your economic trajectory regardless of how well you prepare. It’s one of the reasons that you have insurance. However, even with insurance, there are plenty of things that can go wrong that can interrupt your expected future from a cash flow perspective.
Go over a few of these and see if you have anything in place to protect yourself in the event of the unknown occurring. Of course, if a natural disaster affects your house or your family, that can lead to immediate financial issues. If you go into a routine surgical situation, but something terrible happens, you may end up in the middle of a malpractice suit that can affect you either positively or negatively on the wrong run. And, if the general economy takes a downturn, if you have any stocks or bonds invested, that can change your outlook for the future as well.
What about natural disasters? You may have purchased your home, not knowing that you were on a floodplain, for example. Or perhaps what was not a floodplain before is now one because of various changes in your natural environment. If you have never purchased disaster insurance of any sort, you can literally lose everything in a flash. In that kind of situation, no matter what financial planning you had in place, it will be time to reassess everything you think you knew about money.
You expect and trust your doctor and your hospital. But what if something goes wrong? What if you end up having to sue your hospital for medical malpractice? It is expensive to hire a lawyer. But it is more costly to have to suffer from an injury or event that was not your fault. If the doctor or hospital does something to you in error and you are suffering because of it, it is your financial duty to get whatever out of the situation that you can.
If your previous financial planning did not include the results of your injury, then your new plan has to take this into account.
The economy changes whether you wanted to or not. It cycles up and down. If you put your money into investments and it cycles up, that improves your financial planning ability. However, if you have things invested in the stock market and there is a significant selloff, that puts you in an unfavorable position. Ideally, you can whether these kinds of ups and downs, but if not, you may have to take temporary hits depending on the need to get cash out.