I spend a lot of my life trying to prepare for things that might happen. Life insurance, education, auto insurance, savings…all designed to help mitigate the mess in a disaster. As I sit here at my computer, watching Hurricane Sandy head towards land, I realize how much I’ve failed to do. At some point, however, it is too late to act, and all you can do is react and hope for the best.
Storm preparations, or lack thereof, are much like any other type of financial preparations. It is always better to act ahead of the situation than to be stuck in a situation where you are reacting to an emergency. I can’t think of any situation that couldn’t be improved by acting ahead of time: buying that flood insurance, building up the savings account, keeping your name and face out and about in your professional community, having a back-up plan for the surprises that come with life.
If you wait until a job loss, a big storm, or a medical emergency happens, you’ll find yourself stuck reacting to the situation. Unfortunately, decisions made as reactions are usually more expensive, and there are often fewer good options available. If you have made preparations ahead of time, you will have a broader range of choices available, and they will probably be less expensive overall. On the other side, if you prepare for every possible contingency, you will have prepared for a lot of things that will never happen. It is a risk, but better to take a calculated and well-thought out risk than to let things happen to you.
Once you’ve reached the “nothing you can do now” stage of a situation, you’re often stuck. Plan and think now so that you can always say, “Hey, I’ve prepared for this!” You’ll be glad you did.