If youâ€™re ready to get your finances in tip-top shape for the New Year, there is one simple strategy that can help you achieve economic security and success.
The strategy is to ask yourself these â€śWhat if?â€ť questions, and then come up with a preventive or proactive solution.
- I lose my job (Would you consider entrepreneurship if no one re-hired you?)
- I lose my spouse through death or divorce (Does he or she have life insurance; or do you have a prenup and credit in your own name?)
- I donâ€™t get that raise or promotion (Would you regret overspending?)
- I donâ€™t make as much money as I thought I would make (Would you still be able to pay off all those hefty student loans?)
- My car gets involved in an accident? (Would you have the car insurance you need?)
- I get sick (Would you lament being uninsured and having no healthcare coverage?)
- My child needs surgery (Would medical bills drive you into bankruptcy?)
- I lose my wallet or my credit cards and personal information get stolen? (Would you wish you had looked into identity theft protection?)
- I lose a big chunk or all of my savings/investments (Would you wish you had hired a financial advisor?)
- I am sued (Would you know how to deal with a lawsuit or court action?)
- My house is destroyed (Would you be covered with homeowners insurance to rebuild and know how to avoid contractor scams?)
- My home needs a major repair (Would you have the extra cash needed to fix things?)
- My taxes go up (Would you know how to lower your income taxes or slash your property taxes)?
- My mortgage or rent payment goes up (Would your know whether to walk away from your residence?)
- I am fined (Would you know how to earn additional money to avoid living paycheck to paycheck?)
- My ex stops paying his child support (Would you know how to get child support thatâ€™s rightfully due?)
- The court orders me to pay someone else (Would you have to withdraw IRA or 401(k) retirement funds to satisfy this obligation?)
- My wages are garnished (Would you know how to stop wage garnishment?)
- My employer asks me to relocate…or else (Would you have other job or career options?)
- Financial Armageddon happensâ€¦and the economy has a repeat of 2008 (could you and your family survive yet another recession?)
- The Mayans were right (The Mayan Prophecy suggests a cataclysmic or world-ending event will occur on 12/21/2012. If theyâ€™re right, what will your financial afterlife look like?)
OK, so I just threw that last one in there for shock value. But I hope you get my point: The single best financial strategy anyone can ever take to prepare for the future is to do some contingency planning.
You Need a Financial Plan B. If any one of these things listed above happened to you, how would you cope?
If youâ€™d be financially sunk by any of these personal and financial challenges, itâ€™s time to stop procrastinating and get serious about fixing your money problems and creating an economic backup plan. Today is as good a day as any to get started.
Do you have a solution to any of these dilemmas or did any of these things happen to you already? Sound off on this topic.
â€śAsk The Money Coachâ€ť is a syndicated column written by personal finance expert Lynnette Khalfani-Cox, co-founder of the free financial advice blog, AskTheMoneyCoach.com. Follow Lynnette on Twitter at @themoneycoach.